{"id":229784,"date":"2026-06-08T06:30:11","date_gmt":"2026-06-08T06:30:11","guid":{"rendered":"https:\/\/teknomers.com\/en\/the-ceo-of-a-tech-company-explains-to-employees-why-he-wont-raise-their-salaries-theyll-spend-it-on-ai\/"},"modified":"2026-06-08T06:30:13","modified_gmt":"2026-06-08T06:30:13","slug":"the-ceo-of-a-tech-company-explains-to-employees-why-he-wont-raise-their-salaries-theyll-spend-it-on-ai","status":"publish","type":"post","link":"https:\/\/teknomers.com\/en\/the-ceo-of-a-tech-company-explains-to-employees-why-he-wont-raise-their-salaries-theyll-spend-it-on-ai\/","title":{"rendered":"The CEO of a Tech Company Explains to Employees Why He Won’t Raise Their Salaries: They’ll Spend It on AI"},"content":{"rendered":"\n

The Cost of Progress: Salary Freezes in the Age of AI<\/h2>\n

Just because AI doesn’t take away your job doesn’t free you from suffering the consequences of its implementation. Teradata employees are experiencing this firsthand, as their salaries were frozen this year\u2014not merely to tighten budgets, but as a strategic decision to channel every available dollar into artificial intelligence (AI) investments.<\/p>\n

What Has Happened at Teradata?<\/h3>\n

As reported by Business Insider<\/a>, Teradata CEO Steve McMillan informed over 5,000 employees in January 2026 that they should not expect a salary increase. The company aims to “win in the market with AI,” necessitating increased investment in AI talent and tools. This decision has left many long-term employees, accustomed to annual raises of 2% to 4%, disheartened, even if performance bonuses and shares were offered as consolation.<\/p>\n

AI Takes Your Paycheck<\/h3>\n

The implications of this pause in salary increases are significant. Employees in regions without stringent wage adjustment laws find themselves in situations where their paychecks are directly impacted by the company’s focus on AI. Teradata is not alone in this trend. Firms like TTEC are also prioritizing AI by halting contributions to retirement plans, favoring investment in AI tools and certifications instead.<\/p>\n

A Choice, Not an Inevitability<\/h3>\n

Labour expert Jennifer Moss<\/a> argues that reducing employee salaries is not the only route available. Although Teradata and TTEC have reported revenue declines (5% and 3.2%, respectively), other avenues exist. Companies can consider external financing for AI investments, cut non-essential expenses, or adjust senior management compensation. Staggering AI investments or accepting lower margins temporarily could also relieve the financial strain without burdening employee salaries directly.<\/p>\n

The Shift in Salary Logic<\/h3>\n

AI’s emergence has unsettled traditional salary increase practices. Raises used to rely heavily on parameters such as experience and job title. However, in the current tech landscape, many companies are freezing salaries, highlighting a shift in the priorities driving compensation. The emphasis is now increasingly on how integral AI is to a company’s operations, rather than individual employee performance. This change has widened the wage gap, creating an elite class of highly compensated talent skilled in cutting-edge technologies.<\/p>\n

Firing Is Expensive<\/h3>\n

When discussing the intersection of AI and labor markets, layoffs often dominate the conversation. The first half of 2023 saw an estimated 92,000 tech employees lose their jobs, ostensibly to facilitate investments in AI. However, these layoffs do not come without a hefty price tag. For instance, Oracle has earmarked $2.1 billion for severance packages after laying off 30,000 employees. To mitigate potential legal disputes, major companies like Microsoft and Google are offering incentivized “voluntary layoffs,” risking the loss of their top AI talent.<\/p>\n

Conclusion<\/h3>\n

The trend of salary freezes and layoffs due to AI investments raises important questions about the future of work. While AI technology promises efficiency and innovation, the repercussions on employee compensation and job security highlight a critical balancing act that tech companies must navigate. Firms should explore alternatives to blind investments in AI at the cost of their workforce, ensuring that progress does not come at the steep price of employee well-being.<\/p>\n


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General News – 2<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The Cost of Progress: Salary Freezes in the Age of AI Just because AI doesn’t take away your job doesn’t free you from suffering the consequences of its implementation. Teradata employees are experiencing this firsthand, as their salaries were frozen this year\u2014not merely to tighten budgets, but as a strategic decision to channel every available […]<\/p>\n","protected":false},"author":1,"featured_media":229785,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36399],"tags":[10707,541,673,3905,708,2069,1479,18527,23456,8353],"class_list":["post-229784","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-technology","tag-ceo","tag-company","tag-employees","tag-explains","tag-raise","tag-salaries","tag-spend","tag-tech","tag-theyll","tag-wont"],"_links":{"self":[{"href":"https:\/\/teknomers.com\/en\/wp-json\/wp\/v2\/posts\/229784","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/teknomers.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/teknomers.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/teknomers.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/teknomers.com\/en\/wp-json\/wp\/v2\/comments?post=229784"}],"version-history":[{"count":1,"href":"https:\/\/teknomers.com\/en\/wp-json\/wp\/v2\/posts\/229784\/revisions"}],"predecessor-version":[{"id":229786,"href":"https:\/\/teknomers.com\/en\/wp-json\/wp\/v2\/posts\/229784\/revisions\/229786"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/teknomers.com\/en\/wp-json\/wp\/v2\/media\/229785"}],"wp:attachment":[{"href":"https:\/\/teknomers.com\/en\/wp-json\/wp\/v2\/media?parent=229784"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/teknomers.com\/en\/wp-json\/wp\/v2\/categories?post=229784"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/teknomers.com\/en\/wp-json\/wp\/v2\/tags?post=229784"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}