Teradata and TTEC cut employee pay and benefits to fund AI investments

Teradata told its 5,100 employees in January they will not receive annual salary raises in 2026, with the budget reallocated to AI investments. TTEC paused 401(k) matches for US employees through the end of 2026 for the same reason. CEO Steve McMillan said Teradata's focus is to 'win in the market with AI' by increasing investment in AI talent and expertise.

Teradata employees historically received annual salary increases of 2% to 4%, though increases were not guaranteed each year. Employees may still receive performance-based bonuses and equity shares. The salary freeze applies to employees in countries where regulators do not require market-aligned salary adjustments.

A survey of 117 IT professionals by RBC Capital found that 90% planned to increase AI spending in 2026. According to BCG's 2026 AI Radar survey of 2,360 global companies, companies expect to spend about 1.7% of revenue on AI in 2026. Teradata and TTEC have both faced financial difficulty, with global revenue declining 5% and 3.2%, respectively, in each company's latest financial year.

Workplace strategist Jennifer Moss noted that cutting worker compensation is a choice, not an inevitability—companies can finance AI transformations through debt, reallocating nonessential spending, adjusting executive compensation, or phasing investments over time. Alphabet announced it plans to sell $80 billion in stock to fund its AI infrastructure investments.