IgniteTech CEO Lays Off 80% Workforce to Drive AI Transformation Amid Employee Resistance

Eric Vaughan, CEO of enterprise-software company IgniteTech, remains resolute in his decision to overhaul his company’s workforce in early 2023. Convinced that generative AI represented an “existential” shift, Vaughan moved swiftly to replace nearly 80% of the staff within a year [1]. The decision, based on headcount figures reviewed by Fortune, was driven by resistance to AI adoption within the company. According to Vaughan, changing employees’ minds proved more difficult than adding new skills [1].

The CEO described the transition as an “extremely difficult” but necessary step. During 2023 and early 2024, IgniteTech replaced hundreds of employees—though Vaughan declined to provide an exact number—restructuring the company to focus entirely on AI [1]. Every Monday became “AI Monday,” with employees restricted to AI-related tasks across all departments, including sales and marketing [1].

This mass retraining initiative consumed 20% of the company’s payroll. However, it failed due to significant resistance and even sabotage from employees. Surprisingly, it was the technical staff, not those in marketing or sales, who showed the most resistance [1]. This aligns with broader findings from WRITER’s 2025 enterprise AI adoption report, which found that one in three employees have “actively sabotaged” their company’s AI efforts, with higher rates among millennial and Gen Z workers [1]. Workers often cited job displacement fears or frustration over poorly functioning AI tools as reasons for resistance.

Vaughan, however, believed belief in AI’s transformative potential was the key to success. When employees failed to adopt the new mindset, they were let go. The CEO emphasized that “you can’t compel people to change, especially if they don’t believe” [1]. Ultimately, IgniteTech launched a new hiring initiative for “AI Innovation Specialists,” leading to a full company reorganization under the leadership of Thibault Bridel-Bertomeu, the newly appointed chief AI officer [1].

This centralization of AI across departments allowed IgniteTech to avoid siloed efforts, a challenge noted in the WRITER report. According to the survey, 71% of C-suite executives reported AI applications being developed in isolation, and nearly half said employees were left to figure out generative AI on their own [1].

The results of the transformation were substantial. By the end of 2024, IgniteTech had launched two patent-pending AI solutions, including Eloquens AI, an AI-based email automation platform. Financially, the company remained strong, posting near 75% EBITDA and completing a major acquisition of Khoros. Vaughan cited the company’s ability to build customer-ready products in as little as four days, a pace he said was “unthinkable” under the previous model [1].

While Vaughan acknowledges the difficulty of the transition, he insists it was worth it. He notes that his approach addresses many challenges identified in AI adoption, including lack of strategy, misalignment between IT and business, and the failure to engage AI champions within the organization. However, he cautions against following IgniteTech’s model to the letter. “I do not recommend that at all,” he said. “That was not our goal. It was extremely difficult.” [1]

The debate over AI adoption strategies extends beyond IgniteTech. Joshua Wöhle, CEO of AI training firm Mindstone, has observed similar resistance and argued that reskilling existing employees can be more effective than mass layoffs. His firm trains hundreds of workers monthly at companies like Lufthansa and Hyatt, where he said a “people-first” approach focusing on augmentation rather than automation yields better outcomes [1].

In a similar vein, Klarna, a buy-now-pay-later firm, reduced customer support staff through AI but rehired many of them for new roles, according to a company representative. Meanwhile, Ikea emphasized its approach to AI as one of enhancement, not replacement [1]. Wöhle also pointed to the “boy who cried wolf” problem in the tech sector, where past failed promises of revolutionary technologies—such as NFTs and blockchain—have led to skepticism among workers.

Ultimately, Vaughan’s experience highlights the tension between technological urgency and organizational change. Investment in AI is not enough without cultural alignment. “This is not a tech change,” he said. “It is a cultural change, and it is a business change.” [1]. While his approach may not be scalable for every company, his emphasis on belief and buy-in offers a clear lesson: AI adoption requires more than tools—it demands transformation.

Source: [1] This CEO laid off nearly 80% of his staff because they refused to adopt AI fast enough. 2 years later, he says he’d do it again (https://fortune.com/2025/08/17/ceo-laid-off-80-percent-workforce-ai-sabotage/)