Khaberni - The threat of artificial intelligence is no longer constrained to consuming jobs; it has extended to the wages themselves. In search of liquid funds to finance their technological transformations, companies have started to cut job benefits and compensation packages.
«Business Insider» revealed that the global cloud software firm «Teradata» informed its 5100 employees last January not to expect annual salary raises this year, as it reallocates its budget toward artificial intelligence investments, according to an internal memo that was not previously published but was viewed by the site.
The CEO of the company, Steve McMillan, stated in the memo that «Teradata's» focus for 2026 is on «winning in the market» with artificial intelligence, and that they will increase their investments in attracting talent in this field. He added that the funding for this investment would come from reallocating the annual salary adjustment budget for the year 2026.
While «Teradata» has not officially commented on the budget decision, a spokesperson confirmed to the site that it is actively investing in artificial intelligence to develop its products and services.
In contrast, two American employees who have been with the company for more than ten years said that they were used to receiving annual raises ranging from 2% to 4%, acknowledging that these were not guaranteed every year.
The memo pointed out that the employees might continue to receive performance-related bonuses and stock options as part of their compensation, and that the decision applies in countries where regulatory authorities do not mandate wage adjustments aligned with the market.
According to the site, «Teradata» is the second company to explicitly inform its employees of its preference to spend on artificial intelligence over investing in the workforce. Previously, the medium-sized technology and services firm «T Tech» had frozen its contributions to the retirement plans (401k) for its employees in the United States until the end of 2026, justifying this internally by stating that cutting benefits would help fund the tools and training required for its future in this area.
Jennifer Moss, a workplace environment strategies expert and author of the book «Why Are We Here?», observed that the leaders' frankness in attributing the cuts to artificial intelligence represents a new rhetorical shift. She mentioned that judging this openness—whether it is more honest or more mocking—depends on the context, but it reflects a real change in what leaders dare to say openly, adding that «what becomes sayable tends to become doable».
«T Tech» and «Teradata» operate in a sector where failing to keep up with artificial intelligence is seen as an existential threat. Across various sectors, companies are increasing their spending on this technology: a survey by «RBC Capital» involving 117 IT managers in companies with revenues ranging from less than 250 million dollars to more than 25 billion dollars showed that 90% of them plan to increase their spending on artificial intelligence in 2026.
AI spending ranges from tens of thousands of dollars for small pilot projects to millions for comprehensive transformational operations at an enterprise level. This cost comes at a time when many companies operate on tighter budgets, under pressure from inflation, tariffs, and supply chain disruptions. «Teradata» and «T Tech» recently faced financial difficulties, with their global revenues declining by 5% and 3.2% respectively in the last fiscal year for each of them.
As the cost of artificial intelligence escalates, Moss emphasized that cutting worker compensation is «a choice, not a necessity», as the transformation can be funded by other means: borrowing, reallocating non-essential spending, adjusting executive compensations, acquisitions, phasing investments, or accepting lower profit margins for a specified period. For example, «Alphabet» announced this week a plan to sell shares worth 80 billion dollars to fund its artificial intelligence infrastructure.
Moss attributed companies' reliance on workforce compensation specifically to its being the largest controllable expense item and facing the least organized resistance, noting that the actual cost of investing in artificial intelligence remains relatively small compared to total compensations; companies expect to spend about 1.7% of their revenues on this technology in 2026, according to the «Artificial Intelligence Radar 2026» report issued by «Boston Consulting Group» (BCG), based on a survey covering 2360 global companies.
For his part, economic expert and director of the Welfare Research Center at Oxford University, Jean-Emmanuel de Neuf, predicted that more companies would make similar trade-offs, considering it an indication of a «short-sighted mentality». He concluded that a leader openly reducing human compensations to fund artificial intelligence aims to appear as a decisive management that is technologically advanced, while the message reaching the employees is that they have no secure future in the organization.
