Recently, tech executives have been using AI as an excuse for mass layoffs. But in reality, many experts say, top executives are simply diverting financial resources to AI at the expense of everything else — including employee retention. One of the most striking examples of this is cloud software company Teradata.
Recently, tech executives have been using AI as an excuse for mass layoffs. But in reality, many experts say, top executives are simply diverting financial resources to AI at the expense of everything else — including employee retention. One of the most striking examples of this is cloud software company Teradata.
Teradata management has told its more than 5,000 employees that they should not expect a salary increase this year, as the entire budget is instead being spent on AI, Futurismreports .
“We will fund this investment in AI through a reallocation of the budget allocated for the annual salary adjustment in 2026,” Teradata CEO Steve McMillan wrote in a memo.
Experts believe that such a frank statement from Teradata marks a noticeable change in how technology leaders justify their decisions.
“Whether that’s more honesty or more cynicism depends on your perspective, but it really does indicate a major shift in what leaders are willing to say publicly,” Jennifer Moss, an author and expert on organizational strategies, told the publication. “And what becomes acceptable to say out loud tends to become easier to put into practice.”
For some, this is a sign that CEOs are trying to demonstrate to investors their willingness to implement advanced technologies at any cost, although this may ultimately have the opposite effect.
“When executives openly cut people’s pay to fund AI, they seek to demonstrate decisive and technologically progressive management,” Oxford University economist Jan-Emmanuel De Neve wrote in a commentary for BI. “But the real signal that employees are getting is that they have no stable future at this company.”
