A CEO denied raises to spend money on AI instead. Companies have ‘no idea what they’re going to need in a workforce’ when the AI race is over

While you’re worried about AI replacing you, it may already be cutting into your paycheck. In January, global cloud software company Teradata told its 5,100 employees that there won’t be annual salary raises this year as the business shifts its budget toward AI investments, Business Insider reported. The focus for 2026 is to “win in the market with AI,” CEO Steve Mc Millan said in an internal memo to employees. “We will fund this AI investment by reallocating the budget from 2026 annual salary adjustments,” he added. Teradata employees typically receive a 2% to 4% salary raise each year. Similarly, TTEC told its 15,000 U.S.-based employees in April that it would stop 401(k) matches until the end of 2026. The pause would “protect the long-term strength” of the customer experience technology and services company, Laura Butler, the company’s chief people officer, said in the April 30 memo. Cutting matching would give the business more flexibility to invest in AI certifications and training as well as AI-enabled tools and automation, the company told Business Insider. In fact, a recent Resume Builder survey of 866 business leaders found that more than half of respondents plan on cutting employee compensation and move that spending towards AI. Companies reported cutting bonuses, equity awards, and raises to invest in the technology, believing it will ultimately lead to revenue growth and a competitive advantage. But for Stacie Haller, chief career advisor at Resume Builder, her 30 years of recruiting experience tell her that companies are cutting without thinking about the long-term consequences. “There is such a huge push for companies to stay cutting edge and implement AI, and they think it’s going to cut back their workforce and save all this money,” she told Fortune. “Everybody’s racing to stay ahead of the game, and they have really no idea what they’re going to need in a workforce afterwards.” Cutting raises and benefi