You Will Not Have Raises: The Shocking Decision to Fund Artificial Intelligence

In the midst of the artificial intelligence race, some technology companies are significantly revising their spending priorities, directly impacting employee compensation policies. This is the case with Teradata, a global company active in cloud software, which has communicated to its approximately 5,100 employees the suspension of annual salary increases planned for 2026.

The decision, reported in an internal memo and flagged by Business Insider, was motivated by the need to fund a broader investment plan in AI. According to CEO Steve McMillan, the company's strategic goal is to "win in the market with AI," and to achieve this, it will be necessary to bolster skills and resources dedicated to artificial intelligence. The financial coverage of this plan will occur, in part, through the reallocation of the budget normally designated for annual salary adjustments.

This measure does not necessarily imply a reduction in overall remuneration, as performance-related bonuses and stock allocations remain possible. However, the freeze on structural increases represents a change of approach compared to the established practice, whereby Teradata employees received average increases between 2% and 4%, though not guaranteed on an annual basis.

The measure follows other cases, including that of TTEC, a company that suspended additional pension contributions for U.S. employees, also aiming to free up resources to develop tools and skills related to AI. Other major companies like Meta, Cisco, Salesforce, and Snap are adopting different yet economically converging strategies, including staff reductions or hiring slowdowns, often justified by the need to increase efficiency through automation and intelligent systems.

However, alongside massive investments and contentious choices, there emerges an element of uncertainty regarding the actual economic return of AI initiatives. Some studies indicate that a large portion of pilot projects fails to translate into measurable profit benefits, casting doubt on the sustainability of certain capital allocation choices.

The debate also involves organizational and cultural aspects. Some observers point out that the explicit communication of the link between investments in AI and the reduction of benefits for employees is altering the way companies describe their internal strategies. A change in language that, according to some experts, may have direct effects on job security perception and corporate climate.