{"id":233689,"date":"2026-01-12T04:30:09","date_gmt":"2026-01-12T04:30:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/il\/233689\/"},"modified":"2026-01-12T04:30:09","modified_gmt":"2026-01-12T04:30:09","slug":"this-ceo-laid-off-nearly-80-of-his-staff-because-they-refused-to-adopt-ai-fast-enough-2-years-later-he-says-hed-do-it-again","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/il\/233689\/","title":{"rendered":"This CEO laid off nearly 80% of his staff because they refused to adopt AI fast enough. 2 years later, he says he\u2019d do it again"},"content":{"rendered":"\n

Eric Vaughan<\/a>, CEO of enterprise-software powerhouse IgniteTech<\/a>, was unwavering as he reflected on the most radical decision of his decades-long career. In early 2023, convinced generative AI was an \u201cexistential\u201d transformation, Vaughan looked at his team and saw a workforce not fully on board. His ultimate response: He ripped the company down to the studs, replacing nearly 80% of staff within a year, according to headcount figures reviewed by Fortune.<\/p>\n

Over the course of 2023 and into the first quarter of 2024, Vaughan told Fortune, IgniteTech replaced hundreds of employees, declining to disclose a specific number. \u201cThat was not our goal,\u201d he told Fortune. \u201cIt was extremely difficult \u2026 But changing minds was harder than adding skills.\u201d It was, by any measure, a brutal reckoning\u2014but Vaughan insists it was necessary, and said he\u2019d do it again.<\/p>\n

For Vaughan, the writing on the wall was clear and dramatic.<\/p>\n

\u201cIn early 2023, we saw the light,\u201d he told Fortune in an August 2025 interview, adding he believed every tech company was facing a crucial inflection point around adoption of artificial intelligence. \u201cNow I\u2019ve certainly morphed to believe that this is every company, and I mean that literally every company, is facing an existential threat by this transformation.\u201d<\/p>\n

Where others saw promise, Vaughan saw urgency\u2014believing failing to get ahead on AI could doom even the most robust business. He called an all-hands meeting with his global remote team. Gone were the comfortable routines and quarterly goals. Instead, his message was direct: Everything would now revolve around AI. \u201cWe\u2019re going to give a gift to each of you. And that gift is tremendous investment of time, tools, education, projects \u2026 to give you a new skill,\u201d he explained. The company began reimbursing for AI tools and prompt-engineering classes, and even brought in outside experts to evangelize.<\/p>\n

\u201cEvery single Monday was called \u2018AI Monday,\u2019\u201d Vaughan said, with his mandate for staff that they could work only on AI. \u201cYou couldn\u2019t have customer calls; you couldn\u2019t work on budgets; you had to only work on AI projects.\u201d He said this happened across the board, not just for tech workers, but also for sales, marketing, and everybody else at IgniteTech. \u201cThat culture needed to be built. That was the key.\u201d<\/p>\n

This was a major investment, he added: 20% of payroll was dedicated to a mass-learning initiative, and it failed because of mass resistance, even sabotage. Belief, Vaughan discovered, is a hard thing to manufacture.<\/p>\n

\u201cIn those early days, we did get resistance, we got flat-out, \u2018Yeah, I\u2019m not going to do this\u2019 resistance,\u201d he said. \u201cAnd so we said goodbye to those people.\u201d<\/p>\n

Vaughan was surprised to find it was often the technical staff, not marketing or sales, who dug in their heels. They were the \u201cmost resistant,\u201d he said, voicing various concerns about what the AI couldn\u2019t do, rather than focusing on what it could. The marketing and salespeople were enthused by the possibilities of working with these new tools, he added.<\/p>\n

This friction is borne out by broader research. According to the 2025 enterprise AI adoption report<\/a> by Writer<\/a>, an agentic AI platform for enterprises, one in three workers say they\u2019ve \u201cactively sabotaged\u201d their company\u2019s AI rollout\u2014a number that jumps to 41% of millennial and Gen Z employees. This can take the form of refusing to use AI tools, intentionally generating low-quality outputs, or avoiding training altogether. Many act out because of fears that AI will replace their jobs, while others are frustrated by lackluster AI tools or unclear strategy from leadership.<\/p>\n

Writer\u2019s chief strategy officer Kevin Chung<\/a> told Fortune the \u201cbig eye-opening thing\u201d from this survey was the human element of AI resistance.<\/p>\n

\u201cThis sabotage isn\u2019t because they\u2019re afraid of the technology,\u201d he said. \u201cIt\u2019s more like there\u2019s so much pressure to get it right, and then when you\u2019re handed something that doesn\u2019t work, you get frustrated.\u201d<\/p>\n

He added Writer\u2019s research shows workers often don\u2019t trust where their organizations are headed.<\/p>\n

\u201cWhen you\u2019re handed something that isn\u2019t quite what you want, it\u2019s very frustrating, so the sabotage kicks in, because then people are like, \u2018Okay, I\u2019m going to run my own thing. I\u2019m going to go figure it out myself.\u2019\u201d You definitely don\u2019t want this kind of \u201cshadow IT\u201d in an organization, he added.<\/p>\n

Vaughan said he didn\u2019t want to force anyone.<\/p>\n

\u201cYou can\u2019t compel people to change, especially if they don\u2019t believe,\u201d he said, adding belief was really the thing he needed to recruit for.<\/p>\n

Company leadership ultimately realized they\u2019d have to launch a massive recruiting effort for what became known as \u201cAI innovation specialists.\u201d This applied across the board: to sales, finance, marketing, and elsewhere. Vaughan said this time was \u201creally difficult\u201d as things inside the company were \u201cupside down \u2026 We didn\u2019t really quite know where we were or who we were yet.\u201d<\/p>\n

A couple of key hires helped, starting with the person who became IgniteTech\u2019s chief AI officer, Thibault Bridel-Bertomeu<\/a>. That led to a full reorganization of the company that Vaughan called \u201csomewhat unusual.\u201d Essentially, every division came to report into the AI organization, regardless of domain.<\/p>\n

This centralization, Vaughan said, prevented duplication of efforts and maximized knowledge sharing\u2014a common struggle in AI adoption, where Writer\u2019s survey shows 71% of the C-suite at other companies say AI applications are being created in silos and nearly half report their employees have been left to \u201cfigure generative AI out on their own.\u201d<\/p>\n

In exchange for this difficult transformation, IgniteTech reaped extraordinary results. By the end of 2024, the company had launched two patent-pending AI solutions, including a platform for AI-based email automation (Eloquens AI), with a radically rebuilt team.<\/p>\n

Financially, IgniteTech remained strong. Vaughan disclosed the company, which he said was in the nine-figure revenue range, finished 2024 at \u201cnear 75% Ebitda\u201d\u2014all while completing a major acquisition, Khoros<\/a>.<\/p>\n

\u201cYou multiply people \u2026 give people the ability to multiply themselves and do things at a pace,\u201d he said, touting the company\u2019s ability to build new customer-ready products in as little as four days, an unthinkable timeline in the old regime. In the months since, Vaughan told Fortune in an early 2026 statement, the company has only kept growing its headcount, recruiting globally for AI Innovation Specialists across every function, from marketing to sales to finance to engineering to support.<\/p>\n

What does Vaughan\u2019s story say for others? On one level, it\u2019s a case study in the pain and payoff of radical change management. But his ruthless approach arguably addresses many challenges identified in the Writer survey: lack of strategy and investment, misalignment between IT and business, and the failure to engage champions who can unlock AI\u2019s benefits.<\/p>\n

To be sure, IgniteTech is far from alone in wrestling with these challenges. Joshua W\u00f6hle<\/a> is the CEO of Mindstone, a firm that provides AI upskilling services to workforces, training hundreds of employees monthly at companies including Lufthansa, Hyatt, and NBA teams. He recently discussed the two approaches described by Vaughan\u2014upskilling and mass replacement\u2014in an appearance on BBC Business Today<\/a>.<\/p>\n

W\u00f6hle contrasted the recent examples of Ikea and Klarna, arguing the former\u2019s example shows why it\u2019s better to \u201creskill\u201d existing employees. Klarna, a Swedish buy-now, pay-later firm, drew considerable publicity for a decision to reduce members of its customer support staff in a pivot to AI, only to rehire for the same roles<\/a>.<\/p>\n

\u201cWe\u2019re near the point where [AI is] more intelligent than most people doing knowledge work. But that\u2019s precisely why augmentation beats automation,\u201d W\u00f6hle wrote on LinkedIn<\/a>.<\/p>\n

A representative for Klarna told Fortune the company did not lay off employees, but has instead adopted several approaches to its customer service, which is managed by outsourced customer service providers who are paid according to the volume of work required. The launch of an AI customer service assistant reduced the workload by the equivalent of 700 full-time agents\u2014from roughly 3,000 to 2,300\u2014and the third-party providers redeployed those 700 workers to other clients, according to Klarna. Now that the AI customer service agent is \u201chandling more complex queries than when we launched,\u201d Klarna says, that number has fallen to 2,200. Klarna says its contractor has rehired just two people in a pilot program designed to combine highly trained human support staff with AI to deliver outstanding customer service.<\/p>\n

In an interview with Fortune, W\u00f6hle said one client of his has been very blunt with his workers, ordering them to dedicate all Fridays to AI retraining, and if they didn\u2019t report back on any of their work, they were invited to leave the company.<\/p>\n

He said it can be \u201ckinder\u201d to dismiss workers who are resistant to AI: \u201cThe pace of change is so fast that it\u2019s the kinder thing to force people through it.\u201d He added he used to think if he got all workers to really love learning, then that could help Mindstone make a real difference, but he discovered after training literally thousands of people that \u201cmost people hate learning. They\u2019d avoid it if they can.\u201d<\/p>\n

W\u00f6hle attributed much of the AI resistance in the workforce to a \u201cboy who cried wolf\u201d problem from the tech sector, citing NFTs and blockchain as technologies that were billed as revolutionary but \u201cdidn\u2019t have the real effect\u201d that tech leaders promised.<\/p>\n

\u201cYou can\u2019t really blame them\u201d for resisting, he said. Most people \u201cget stuck because they think from their work flow first,\u201d he added, and they conclude AI is overhyped because they want AI to fit into their old way of working. \u201cIt takes a lot more thinking and a lot more kind of prodding for you to change the way that you work,\u201d but once you do, you see dramatic increases. A human can\u2019t possibly keep five call transcripts in their head while you\u2019re trying to write a proposal to a client, he offers, but AI can.<\/p>\n

Ikea echoed W\u00f6hle when reached for comment, saying its \u201cpeople-first AI approach focuses on augmentation, not automation.\u201d A spokesperson said Ikea is using AI to automate tasks, not jobs, freeing up time for value-added, human-centric work.<\/p>\n

The Writer report notes companies with formal AI strategies are far more likely to succeed, and those who heavily invest in AI outperform their peers by a large margin. But as Vaughan\u2019s experience shows, investment without belief and buy-in can be wasted energy. \u201cThe culture needed to be built. Ultimately, we ended up having to go out and recruit and hire people that were already of the same mind. Changing minds was harder than adding skills.\u201d<\/p>\n

From the vantage point of early 2026, Vaughan reflected in a statement to Fortune, monthly all-hands meetings look nothing like they used to: \u201cWe killed the format of reviewing goals and metrics. Now teams demo what they built.\u201d He wanted to stress something else: Despite the drastic actions he took to restructure, he still doesn\u2019t think he\u2019s ahead of the curve.<\/p>\n

\u201cWe\u2019re just not getting run over from behind yet,\u201d he said. \u201cThe pace of change in AI is relentless. If we don\u2019t keep pushing, keep learning every single day, we\u2019re toast.\u201d<\/p>\n

For Vaughan, there\u2019s no ambiguity. Would he do it again? He doesn\u2019t hesitate: He\u2019d rather endure months of pain and build a new, AI-driven foundation from scratch than let an organization drift into irrelevance.<\/p>\n

\u201cThis is not a tech change. It is a cultural change, and it is a business change,\u201d he said, adding he doesn\u2019t recommend others follow his lead and swap out 80% of their staff.<\/p>\n

\u201cI do not recommend that at all,\u201d he said. \u201cThat was not our goal. It was extremely difficult.\u201d<\/p>\n

But at the end of the day, he added, everybody\u2019s got to be in the same boat, rowing in the same direction. Otherwise, \u201cwe don\u2019t get where we\u2019re going.\u201d<\/p>\n

A version of this story was published on Fortune.com on August 17, 2025.<\/p>\n

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