Here's why some companies are choosing #AI spending over employee raises. #Teradata

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0:00How would you feel if your boss told you

0:02you weren't getting an annual raise

0:04because the budget was being spent on AI

0:06instead? That is what employees at a

0:09global cloud software company called

0:11Teradata were told in January, according

0:13to an internal memo seen by Business

0:15Insider. In the memo, Teradata CEO Steve

0:18McMillan told staff that the company

0:20would increase its spending on AI in

0:222026, and that to fund those

0:24investments, it would reallocate the

0:25budget from annual salary adjustments.

0:28Teradata is the second company that

0:30Business Insider has reported is openly

0:32telling staff it is pursuing AI spending

0:35over [music] workforce investment.

0:37T-Mobile, a technology and services

0:40firm, recently cut 401(k) matches for

0:43its [music] US employees through the end

0:45of 2026. The company told us it needed

0:47financial flexibility, [music] in part,

0:50to fund AI tools, automation, and

0:52training. Companies have long cut costs

0:54to fund new priorities, and for many,

0:57falling behind on AI is now seen as an

0:59existential risk to business. Workplace

1:02experts say [music] that what feels new

1:04is how openly some leaders are naming AI

1:07as the reason [music] for cuts. The move

1:09projects a decisive tech-forward image,

1:12but talking about employees as costs

1:14[music] and capacity can undermine trust

1:16at the very moment companies need

1:18workers to help make AI succeed. If your

1:21company has recently cut [music] back

1:23any benefits, AI-related or otherwise,

1:26we'd like to hear from you. You can find

1:28contact details and read the full story

1:29[music] at Business Insider.

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