Disney cuts hundreds of jobs, then spends $60M on 66 AI engineers
Disney is paying a premium for an AI team weeks after laying off its own tech staff, showing a clear shift in what skills companies value.
Market · Source: Benzinga (via TradingView)
What happened
The Walt Disney Company is hiring 66 employees from the bankrupt startup Character.AI. Disney plans to pay them a combined $60 million a year. This move comes just two weeks after Disney laid off several hundred workers, including some of its own tech staff. It is the third major round of job cuts since mid-March.
Disney is also setting aside a $30 million retention pool to keep these new hires. Over three years, the company expects to spend $180 million on compensation and retention for this specific team. Meanwhile, Disney offered only $20 million to buy Character.AI's actual technology and intellectual property. The company clearly values the engineers more than the product itself.
Most of the team has already made the move. Fifty-six of the engineers resigned from Character.AI to join Disney. The remaining 10 employees are currently waiting for updates on their US work visas before they can officially start.
By the numbers
- $60 million — Annual compensation for the 66 Character.AI employees
- $30 million — Aggregate retention pool to keep the new hires
- $20 million — Disney's bid for Character.AI's technology and IP
- 10 — Number of hired engineers waiting on US work visa updates
Why it matters
This shows that companies have money to spend, but they are highly specific about where they spend it. They are willing to cut general tech roles while paying top market rates for specialized artificial intelligence experience. Job seekers need to understand that layoffs do not always mean a hiring freeze. It often means a company is swapping out one set of skills for another.
Buying a ready-made team from a struggling startup is a fast way for large corporations to build their AI systems. Instead of building a team from scratch, Disney hired the startup's CEO as its tech chief and brought his engineers along. This means specialized startup teams might increasingly get absorbed by large legacy companies.
Who this hits
Laid-off tech workers
General software engineers and tech staff face a shrinking job pool at large media companies. Disney's recent cuts show that legacy companies are reducing traditional tech roles to fund new initiatives.
AI specialists
Engineers with direct experience building artificial intelligence models are in high demand. Companies are willing to pay massive premiums and offer retention bonuses to secure this specific talent.
Immigrant tech workers
Visa processing remains a bottleneck even for highly paid, specialized talent. Ten of the engineers hired by Disney are currently delayed from starting while they wait for work visa updates.
What to do this week
- Look at the specific skills companies in your industry are currently buying, rather than just the job titles they are cutting.
- If you have experience in high-demand areas like AI, highlight your practical project work to stand out to legacy companies looking to pivot.
- For visa holders, factor in processing delays when negotiating start dates, even if you are joining a well-funded team.
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My take
Companies are not out of money. They are simply trading one type of skill for another. When Disney cuts hundreds of jobs but commits $180 million over three years to a small AI team, the message is clear. You must ensure your skills align with what the market is actually buying today.