Teradata freezes salary raises for 5,000 staff to fund AI

Teradata announced that roughly 5,000 employees will not receive the usual annual salary adjustments, reallocating that budget to accelerate artificial‑intelligence projects. CEO Steve McMillan said the decision is meant to help the company “win in the market with AI.”

Employees may still earn performance‑based cash bonuses and receive stock awards, and workers in countries where raises are legally mandated will not be affected.

The San Diego‑based data‑warehousing firm, which generates about $1.5 billion in recurring revenue, reported a first‑quarter operating loss of $36 million, largely due to a 71 % rise in operating expenses tied to legal fees from a $480 million settlement with SAP. Despite the loss, Teradata’s shares rose roughly 1 percent.

The compensation freeze mirrors recent cost‑reallocation moves at other tech companies, such as TTEC, which also redirected employee‑benefit spending toward AI development.