Dive Brief:
- More than half of U.S. companies are reducing — or plan to reduce — employee compensation to free up capital for artificial intelligence investments, ResumeBuilder.com found in a recent survey.
- By the end of the year, 54% of companies will have cut employee compensation and 26% will have laid off workers to fund AI efforts, according to the findings. The compensation reductions extend beyond base salary, impacting bonuses, equity or stock awards, raises and benefits. The firm surveyed 866 U.S. business leaders.
- “Companies are making a clear calculation: AI investment is the priority, and employee compensation is where the budget will come from,” Stacie Haller, ResumeBuilder’s chief career advisor, said in a press release on the report. “This is not just layoffs. Bonuses, raises, equity, benefits, and base pay are all being cut simultaneously, across industries.”
Dive Insight:
The study comes amid growing concern about the impact of AI on the workforce.
Since 2023, AI has been mentioned in 91,753 U.S. job cut announcements, roughly 3% of all layoffs during that period, according to outplacement firm Challenger, Gray & Christmas.
On March 11, software company Atlassian said it was slashing 10% of its workforce, citing AI investment as a key driver of the decision.
“These actions are intended to rebalance the company to accelerate building the future of teamwork in the AI era,” the company said in a securities filing. “This includes self-funding further investment in key strategic priorities, such as AI and enterprise sales, reorganizing its teams to move with more focus and speed across the Atlassian System of Work, and optimizing for long-term operational efficiency and sustainability.”
In another recent example, digital payments company Block said last month that it planned to shrink its headcount from 10,000 employees to just over 6,000, while leaning on AI to replace the eliminated workers.
Fear of falling behind competitors is a primary reason companies are cutting jobs and compensation to fund AI investments, according to ResumeBuilder.com. Three-quarters of respondents said AI will give them a competitive advantage, while 74% said it will lead to revenue growth. More than half (56%) cited board or investor pressure to adopt the technology.
“Boards and investors are asking hard questions about AI strategy, and leaders feel they cannot afford to sit on the sidelines,” Haller said. “The risk of falling behind is being treated as more urgent than the risk of losing talent. That is a short-sighted trade-off. When the job market shifts back in employees’ favor, these companies will find it much harder to attract and retain the people they need.”
A recent report from EY painted a rosier picture of AI’s workforce impact. In that EY study, more than two-thirds of CEOs said they expected to maintain or increase workforce levels in 2026 despite AI investments, while the share who anticipated reduced headcount dropped to 24% in December, down from 46% at the beginning of 2025. Many respondents expressed the view that AI will reshape roles rather than eliminate jobs outright, shifting employees away from routine tasks and toward higher-value work.
“This is reflective of the fact that CEOs are taking a realistic and pragmatic view on the need to add new skillsets and to keep human oversight in many AI use cases for the near future,” Andrea Guerzoni, global vice chair of EY-Parthenon, said in the EY report.
