Corporate America Reverses Workplace Perks Amid AI Spending and Rising Costs

The era of ever-expanding workplace perks is ending. It’s not just free kombucha and laundry—policies like paid parental leave and retirement matches are now on the chopping block.

Why It Matters

Corporate America spent years during the labor shortage competing to offer the most generous workplace benefits. Now, with soaring health-care costs, shrinking workforces, and an AI reckoning, some employers are rolling them back.

The Big Picture

First, it was the return to the office. Now, benefits that became standard during COVID and workforce shortages—from fertility subsidies to 401(k) matches—appear on shakier ground in an era dominated by AI spending and rising health costs.

What’s Happening

• Deloitte and Zoom are among the largest companies to recently grab headlines with pullbacks on family leave. Deloitte sought to "better align with the marketplace," while also trimming vacation time and ancillary health perks like fertility support.
• TTEC, a customer experience technology firm, told Business Insider it paused 401(k) matching for U.S. employees this year, citing spending on AI tools, automation, and training.

A quiet pullback is coming from companies large and small across the country as economic and labor market realities undergo a drastic shift.

Expert Insights

Experts largely blame cuts on double-digit year-over-year jumps in health benefit costs.

"I think reality is setting in," said Rich Fuerstenberg, a senior partner on Mercer's Health Benefits Practice, referring to companies' need to reevaluate the total benefits they can truly afford. "There's more scrutiny, and it's, 'Why are we over market? What am I getting from these programs?'"

By the Numbers

• A March survey of 500 U.S. business leaders by ResumeBuilder.com found more than half were cutting back benefits (53%), bonuses (61%), and raises (53%) to fund AI investments.
• A Mercer 2026 CFO Perspective on Health survey revealed 38% of chief financial officers are cutting back benefits elsewhere due to rising health costs over the past two years.
• Drug spending alone jumped from 21% of companies' total health-care spending to 24% in a three-year period, according to Jim Winkler, chief strategy officer for the Business Group on Health.
• Shawn Gremminger, CEO of the National Alliance of Healthcare Purchaser Coalitions, noted, "Health care costs, which feel out of control, are squeezing out other benefits for which you have greater control."

Between the Lines

Benefits consultants say white-collar workers may be in less of a position to demand perks as AI appears more capable of replacing at least some of the workforce. It’s a reversal from the flashy days of the tech boom, when companies raced to recruit and retain talent with perks like meals, massages, and in-house fitness centers.

The tech industry, in particular, has seen major cutbacks in perks culture and layoffs.

Reality Check

Companies still need high-skilled workers and generally try to maximize benefits to attract and retain top talent. But that equation is getting harder to balance.