GoKawiilAI isn't just coming for your job. It's coming for your pay.
As companies look for cash to fund their AI transformations, some are finding it by shrinking employee benefits and compensation packages.
Teradata, a global cloud software company, told its 5,100 employees in January not to expect an annual salary raise this year as it reallocates the budget toward AI investments, according to an internal memo seen by Business Insider and not previously reported.
Teradata's focus for 2026 is to "win in the market with AI," CEO Steve McMillan said in the memo, and to help achieve that, the company will be increasing investment in AI talent and expertise.
"We will fund this AI investment by reallocating the budget from 2026 annual salary adjustments," said McMillan.
Teradata did not comment on the budget decision. A spokesperson told Business Insider that the company is actively investing in AI to innovate its products and services.
Two US-based Teradata employees, both of whom have been at the company for over 10 years, told Business Insider they generally received annual salary increases of 2% to 4%, though they said the increases were not guaranteed each year.
Employees may still receive performance-based bonuses and equity shares as part of their compensation, the memo said. The decision applies to employees in countries where regulators do not require market-aligned salary adjustments.
Teradata is the second company that Business Insider has reported is openly telling staff it is pursuing AI spending over workforce investment.
TTEC, a midsize technology and services firm, recently paused 401(k) matches for its US employees through the end of 2026, saying in internal communications that the benefits retreat would help fund the tools, training, and capabilities necessary for the company's AI future.
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