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Here's why some companies are choosing #AI spending over employee raises. #Teradata
Here's why some companies are choosing #AI spending over employee raises. #Teradata
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0:00
How would you feel if your boss told you
0:02
you weren't getting an annual raise
0:04
because the budget was being spent on AI
0:06
instead? That is what employees at a
0:09
global cloud software company called
0:11
Teradata were told in January, according
0:13
to an internal memo seen by Business
0:15
Insider. In the memo, Teradata CEO Steve
0:18
McMillan told staff that the company
0:20
would increase its spending on AI in
0:22
2026, and that to fund those
0:24
investments, it would reallocate the
0:25
budget from annual salary adjustments.
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Teradata is the second company that
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Business Insider has reported is openly
0:32
telling staff it is pursuing AI spending
0:35
over [music] workforce investment.
0:37
T-Mobile, a technology and services
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firm, recently cut 401(k) matches for
0:43
its [music] US employees through the end
0:45
of 2026. The company told us it needed
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financial flexibility, [music] in part,
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to fund AI tools, automation, and
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training. Companies have long cut costs
0:54
to fund new priorities, and for many,
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falling behind on AI is now seen as an
0:59
existential risk to business. Workplace
1:02
experts say [music] that what feels new
1:04
is how openly some leaders are naming AI
1:07
as the reason [music] for cuts. The move
1:09
projects a decisive tech-forward image,
1:12
but talking about employees as costs
1:14
[music] and capacity can undermine trust
1:16
at the very moment companies need
1:18
workers to help make AI succeed. If your
1:21
company has recently cut [music] back
1:23
any benefits, AI-related or otherwise,
1:26
we'd like to hear from you. You can find
1:28
contact details and read the full story
1:29
[music] at Business Insider.