Software company tells its 5,000 employees no raises this year so the money can go to AI

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Over 5,000 Teradata employees will not receive raises in 2026 due to budget reallocation toward artificial intelligence investments.
Teradata CEO Steve McMillan cited the need to “win in the market with AI” as the reason for the salary freeze, according to a Business Insider report.
While raises are withheld, employees might get performance-based bonuses and stock shares. Non-binding raises in countries requiring such adherence remain unaffected.
This decision comes amidst a backdrop of increased tech layoffs and follows a similar move by tech firm TTEC, which stopped 401(k) matching contributions for AI investment.
Workplace strategist Jennifer Moss noted that linking these cutbacks to AI could signify a shift in corporate communications, either marking a more honest disclosure or a cynical maneuver.
Teradata reported a first-quarter operating loss of $36 million, driven by a rise in operating expenses; however, part of this loss was offset by lower employee compensation due to last year’s restructuring.