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While you\u2019re worried about AI replacing you, it may already be cutting into your paycheck.<\/p>\n
In January, global cloud software company Teradata told its 5,100 employees that there won\u2019t be annual salary raises this year as the business shifts its budget toward AI investments, Business Insider<\/em> reported.\u00a0<\/p>\n The focus for 2026 is to \u201cwin in the market with AI,\u201d CEO Steve McMillan said in an internal memo to employees. \u201cWe will fund this AI investment by reallocating the budget from 2026 annual salary adjustments,\u201d he added. Teradata employees typically receive a 2% to 4% salary raise each year.<\/p>\n 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 \u201cprotect the long-term strength\u201d of the customer experience technology and services company, Laura Butler, the company\u2019s 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<\/em>.\u00a0<\/p>\n 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.<\/p>\n 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.\u00a0<\/p>\n \u201cThere is such a huge push for companies to stay cutting edge and implement AI, and they think it\u2019s going to cut back their workforce and save all this money,\u201d she told Fortune<\/em>. \u201cEverybody\u2019s racing to stay ahead of the game, and they have really no idea what they\u2019re going to need in a workforce afterwards.\u201d\u00a0<\/p>\n Cutting raises and benefits may be a move to create some attrition instead of conducting mass layoffs in the name of AI productivity, Haller said. Companies are taking advantage of job-hugging in the low-hire, low-fire labor market, she explained, but cutting raises and benefits could backfire on employers in the long run, as high-performers move on to new roles because they can get better compensation elsewhere.\u00a0<\/p>\n \u201cPeople have long memories. They\u2019re going to remember when they didn\u2019t get bonuses because of [AI spending], and if it doesn\u2019t work out in the end, I don\u2019t think it\u2019s going to be a happy ending for some of these companies,\u201d Haller said.\u00a0<\/p>\n January Machold, a spokesperson from Teradata, declined to comment on the decision to pause raises but said that the company is \u201cactively investing in AI\u201d in both products and services, including a new autonomous agentic platform.\u00a0<\/p>\n \u201cThese are concrete investments in product innovation\u2014and in the customers and industries that depend on Teradata for their most critical workloads. We are confident in the direction of the business,\u201d Machold told Fortune<\/em> in a statement.\u00a0\u00a0<\/p>\n TTEC did not respond to Fortune\u2019s <\/em>request for comment.<\/p>\n A year without a raise is essentially a pay cut in an economy with a 3.8% inflation rate, but it\u2019s indicative of how businesses are changing, according to Jared Pope, an employment law, benefits, and human resources attorney and founder of Work Shield, a workplace misconduct investigations company.\u00a0<\/p>\n \u201cIn the past, pay raises were tied to longevity,\u201d he said. \u201cWhere we are today, or at least where we\u2019re headed to, is if you have a measurable business impact on the company, both immediately and near-term, not necessarily long term, you\u2019re the one that\u2019s going to have the higher pay.\u201d\u00a0<\/p>\n Employers are more focused on workers who can help them in the next three months, not the next two years, he explained.\u00a0<\/p>\n Teradata\u2019s move comes as companies are heavily investing in AI. Global AI spending is expected to hit $2.53 trillion in 2026 and reach a staggering $3.34 trillion in 2027, according to business and technology insights firm Gartner.\u00a0<\/p>\n The problem isn\u2019t that employers are cutting raises, it\u2019s more about how major changes are communicated, Pope said.\u00a0<\/p>\n \u201cIf that communication is done correctly, then you\u2019ll have a lot more buy-in from members, but when that communication is lacking, that\u2019s when organizations are going to see a very high increase in the frustration of their team members,\u201d he explained. <\/p>\n Saying directly to employees that their typical wage increases are going toward AI could lead to turnover, he added, even if that\u2019s the truth.\u00a0\u00a0<\/p>\n Another approach to cutting down the workforce is voluntary layoffs, a move that rewards loyal workers.\u00a0<\/p>\n \u201cThe voluntary exit option gives the employer the ability to say, \u2018It\u2019s not about the fact that we don\u2019t think you\u2019re doing a good job, but if you\u2019re thinking about it\u2019s time for me to move on. I\u2019m going to incentivize you to do that because we need to cut some staff,\u2019\u201d Domenique Camacho Moran, a lawyer and partner at employment law firm Farrell Fritz, told Fortune<\/em> in April.\u00a0<\/p>\n<\/div>\n #Company #deny #raises #spend #idea #theyre #workforce<\/p>\n","protected":false},"excerpt":{"rendered":" While you\u2019re 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\u2019t be… <\/p>\n","protected":false},"author":1,"featured_media":5951,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[1285,630,797,8424,2140,863,572,1786,3654,1927,4922,1890],"class_list":["post-5950","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance-news","tag-chief-executive-officer-ceo","tag-company","tag-compensation","tag-deny","tag-idea","tag-layoffs","tag-raises","tag-spend","tag-theyre","tag-wages","tag-worker-benefits","tag-workforce"],"_links":{"self":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/5950","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=5950"}],"version-history":[{"count":0,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/5950\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/media\/5951"}],"wp:attachment":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=5950"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=5950"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=5950"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}