The Scoop: As federal shutdown hits, clear communication becomes a survival strategy

Plus: Disney sends cease-and-desist to Character.AI over intellectual property; Spotify CEO addresses power transition as he steps down from role.

Just after midnight, the U.S. federal government entered a shutdown when Congress failed to pass required funding legislation. The dispute stems largely from partisan disagreements over health care subsidies, Medicaid cuts and discretionary spending levels.

The White House’s Office of Management and Budget has directed federal agencies to prepare for not just furloughs but permanent cuts via reduction-in-force plans, targeting programs deemed out of step with presidential priorities, marking a more aggressive action than in past shutdowns.

Essential services, including Social Security, Medicare, military operations, law enforcement, immigration enforcement and air traffic control, are expected to continue unaffected, though many of these workers will now go without pay.

“It’s possible that lawmakers pass legislation to ensure active-duty troops and Pentagon employees continue to get paid during the shutdown. But troops will miss a paycheck if the shutdown isn’t resolved before Oct. 15,” Politico reports.

Travelers will still be able to get into national parks, though with fewer staff on hand and a contingency plan that says, “If visitor access becomes a safety, health or resource protection issue … the area must be closed,” per the National Park Service.

The FAA will furlough 25% of its staff and remaining employees will also continue working without pay, citing that their work is “necessary to protect life and property.”

President Donald Trump, ahead of the official shutdown, said, “The last thing we want to do is shut it down, but a lot of good can come from shutdowns.”

Why it matters: This won’t be an easy time for affected organizations.

In a legislative or funding impasse, many knowns can slip into uncertainty, including what programs continue, what staff are retained and what services pause.

When business operations are curtailed, silence or reactive messaging can be interpreted negatively, so this is a time when organizations need to speak up.

Businesses should plan for the short term now but they should also be discussing longer term scenarios in case the shutdown isn’t quickly resolved.

Proactive transparency about what is continuing, what is suspended and why, helps maintain stakeholder and employee trust.

If parts of your organization must shut down, it’s critical to explain the criteria and decision logic, perhaps with website updates, emails or an announcement on social media, to avoid confusion and keep people in the know.

Editor’s Top Reads:

• Longtime Spotify CEO and founder Daniel Ek announced he is stepping down from his role, but will remain very much “hands on.” In a letter to employees and publicly shared on the Spotify website, Ek said Gustav Söderström and Alex Norström, the company’s two co-presidents will become co-CEOs on January 1, 2026. Meanwhile, Ek will move to executive chairman. Ek said that as executive chairman, he’ll have a much larger role in the Swedish company than most traditional U.S. executive chairs, particularly in the “long arc of the company.” Ek told employees that not much would change in how they’ve already been operating, emphasizing the change in titles reflects what they’re already doing. Spotify, in another release, announced there would be a town hall to discuss the transition with an open dialogue. Ek was clear and transparent in the change, explaining next moves and reassuring employees that this isn’t a shake-up, but more of a natural transition. By providing the town hall, employees will get a chance to ask questions with the three leaders and receive more information. Change can be tricky to navigate, but explaining the decision plainly and providing opportunities for more details is always a good way to communicate.
• Disney has sent a cease-and-desist letter to Character.AI, a startup whose chatbots let users talk to AI versions of famous figures, including those that resemble beloved Disney characters. In a letter to the tech company, obtained by Axios, Disney said, “Character.ai’s infringing chatbots are known, in some cases, to be sexually exploitive and otherwise harmful and dangerous to children, offending Disney’s consumers and extraordinarily damaging Disney’s reputation and goodwill.” The company’s concern isn’t just copyright. Fears that the technology could harm the brand’s family-friendly image spurred the action, with Character.AI removing the function while saying, “It’s always up to rightsholders to decide how people may interact with their IP, and we respond swiftly to requests to remove content that rightsholders report to us.” Companies need to closely watch how their intellectual property shows up in new technologies like AI, especially given its undefined regulatory framework. If a company’s IP is misused or misrepresented, it can quickly damage reputation or send a confusing message, not only create legal problems.
• And speaking of undefined regulatory framework, AI is drawing increasing criticism not just for issues like bias, hallucinations and data privacy, but for its environmental costs and impact, particularly the large amounts of energy that fuel its computations. As use of AI grows, so does its carbon footprint, and some employees, especially knowledge workers, are already pushing back, saying they feel uneasy powering AI tools in light of climate concerns, Fast Company reports. That resistance is spreading into public debates, making energy use a PR liability for AI-first companies. Fast Company journalist Pete Pachal argues that “brands must proactively acknowledge (this) and respond through better transparency, efficient systems and active communication.” To avoid resentment and distrust, businesses should be listening, taking concerns seriously, researching and addressing how they can use the technology more responsibility and keeping an open dialogue when there are unknowns.

Courtney Blackann is a communications reporter. Connect with her on LinkedIn or email her at courtneyb@ragan.com. 

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