AI layoffs at IgniteTech saw CEO Eric Vaughan replace nearly 80% of his workforce in 2023-2024 after employees resisted and even sabotaged the company’s AI transformation. Despite investing 20% of payroll in training, Vaughan concluded that “changing minds was harder than adding skills” and rebuilt the company with AI-first believers. The result: 75% profit margins and 4-day product development cycles.
The fear that AI will take your job stopped being theoretical.
When I read about Eric Vaughan firing 80% of his company for refusing to embrace AI, my first reaction was the same as yours: that’s terrifying. But then I sat with it. And the more I thought about it, the more I realized this story isn’t quite what the headlines make it seem.
Yes, it’s a cautionary tale. But it might also be something else entirely: the first honest acknowledgment of what many CEOs are already thinking but won’t say out loud.
What Actually Happened at IgniteTech
Let’s start with the facts, because they’re important.
In early 2023, Eric Vaughan looked at generative AI and saw what he called an “existential transformation.” Not just for tech companies. For every company. He decided IgniteTech, his enterprise software firm, needed to become AI-first or die.
His first move wasn’t firing people. It was investing in them.
Vaughan implemented “AI Mondays” where employees could only work on AI projects. No customer calls. No budgets. Just AI. He invested 20% of the company’s entire payroll into training, tools, and external experts. He gave his people every resource to adapt.
It didn’t work.
Employees resisted. Some passively ignored the mandate. Others actively sabotaged it, deliberately delivering poor results or skipping training sessions entirely. After a full year of investment, IgniteTech still wasn’t shipping AI-powered products.
By mid-2024, Vaughan made a decision most CEOs would find unthinkable: he replaced nearly 80% of his workforce with people who already believed in AI’s potential.
🚫 The Scale: IgniteTech replaced hundreds of employees, roughly 80% of the company, between 2023-2024. This wasn’t gradual attrition. It was a complete rebuild.
The Surprising Truth About Who Resisted AI Layoffs
Here’s what I didn’t expect: the strongest resistance didn’t come from sales or marketing. It came from the tech teams.
The engineers. The developers. The people who theoretically should have been most excited about new technology.
Why? I think it comes down to identity.
Coding isn’t just a job for most developers. It’s a craft and a status marker. When an AI can generate scaffolding in seconds, the meaning of being “the builder” gets shaky. When meaning is threatened, sabotage is one way humans regain control. Slowing adoption, raising “safety” flags, or insisting the models “aren’t production ready” buys time and keeps status intact.
Sales teams didn’t fight as hard because their status comes from human persuasion and relationships. AI was a sidekick, not a rival.
This isn’t unique to IgniteTech. A 2025 survey from Writer found that one in three employees across all industries admit to actively sabotaging their company’s AI rollouts. Among millennials and Gen Z, it’s 41%.
Vaughan’s Brutal Logic
When asked about the mass layoffs, Vaughan was blunt: “You can’t compel people to change, especially if they don’t believe.”
His core insight was that this wasn’t a skills problem. It was a belief problem. “Changing minds was harder than adding skills,” he explained. He could provide more training, more tools, more time. But none of it would matter if people fundamentally rejected the direction.
When asked if he’d do it again, his answer was immediate: “Absolutely.”
Cold? Yes. But there’s a logic to it that’s hard to dismiss entirely.
Did It Actually Work?
From a pure business perspective, the results are staggering.
IgniteTech now operates at 75% EBITDA margins. The industry average for enterprise software is 25-35%. They can take a product from concept to launch in four days. They’ve released two patent-pending AI products, Eloquens AI and MyPersonas, and completed a major acquisition of Khoros.
The company that once couldn’t get employees to adopt AI is now one of the most efficient software operations in the industry.
ℹ️ By The Numbers: 75% EBITDA margin (vs 25-35% industry average), 4-day product development cycles, 2 new AI products launched, 1 major acquisition completed.
The Counterpoint: Why Klarna Reversed Course
Before you conclude that mass AI replacement is the inevitable future, consider Klarna.
The Swedish fintech giant took a similar aggressive approach, using AI to eliminate roughly 700 customer service positions. Their AI handled 75% of customer chats. The metrics looked great.
Then customer satisfaction tanked. People complained about impersonal interactions and the inability to reach humans for complex problems. CEO Sebastian Siemiatkowski publicly admitted they’d gone too far, saying “cost unfortunately seems to have been a too predominant evaluation factor.”
Klarna is now rehiring human agents and implementing a hybrid model.
The lesson: AI replacement works better for some roles than others. Enterprise software development (IgniteTech) is different from consumer customer service (Klarna). Context matters.
A Different Way to Think About AI Layoffs
Here’s where I’m going to say something uncomfortable.
What if the 80% who got fired are actually better off?
That sounds callous. But hear me out. Humans rarely abandon comfortable ruts without a shove. Layoffs are a terrible shove, but they’re still a shove. Within months, many of those engineers likely landed at startups that view AI as oxygen, not a threat. They were forced to learn the new stack for survival, not for a corporate badge.
History rhymes here. Telegraph operators who saw the writing on the wall became early switchboard experts. Typesetters displaced by phototypesetting moved into digital prepress and desktop publishing. Dockworkers who fought containerization in the 1950s-60s were hurt most; those who adapted became crane operators and supply-chain IT specialists at higher wages.
The pattern suggests that forced adaptation, while painful, often yields better outcomes than slow erosion.
⚠️ The Real Question: The people most hurt in every technology transition are those who wait for permission to change. Being pushed may compress a five-year drift into a six-month sprint.
What This Means for Your Job
The IgniteTech story isn’t about robots coming for all of us tomorrow. It’s about a new dividing line in the workforce: between those willing to adapt and those who aren’t.
If you’re in a role where AI can shoulder most of the load, resistance won’t protect you. It will simply delay the moment you have to adapt while making that moment more painful.
The good news: adaptation is doable. And choosing your own path beats being forced down one.
Practical Steps to Make Yourself AI-Proof
1. Treat AI like a calculator, not a rival. When calculators arrived, mathematicians didn’t vanish. They moved to proofs, models, and theories. When spreadsheets appeared, accountants didn’t disappear. They advised on strategy. If code autocompletes itself, your edge moves to architecture, product sense, and user empathy.
2. Be the person who says “How can we use this?” The biggest lesson from IgniteTech is that attitude matters more than skill. Curiosity and willingness to experiment are now the most valuable career assets you can have.
3. Volunteer for AI pilots at your company. When your company announces it’s testing AI tools, raise your hand. This signals you’re an adapter, not a resister. It gives you early access to new skills.
4. Double down on human skills. AI cannot replicate true empathy, creative brainstorming, strategic negotiation, or strong client relationships. These skills are becoming more valuable, not less.
If you’re looking for ways to start using AI in your daily life, check out our Start Here guide or browse our beginner guides. The goal isn’t to out-compete machines. It’s to become the person who knows how to use them.
The Bottom Line on AI Layoffs
Eric Vaughan’s move is harsh. But it might have freed two groups: the company to pursue an AI-first model without cultural drag, and the departing employees to reinvent themselves before the market made the choice for them.
You don’t have to like the method to see the opportunity hidden inside it. The next time a headline screams about AI taking jobs, remember that history’s pattern is messy but consistent: the sooner you pivot to new tools, the sooner you stop fearing them.
Related reading: AI Layoffs 2025: What the Numbers Mean for 2026 and 8 AI Skills That Actually Matter in 2026.
Frequently Asked Questions About AI Layoffs
Are AI layoffs coming for every industry?
Most companies won’t take an approach as extreme as IgniteTech. But workforce transformation is expected across most industries, especially knowledge work. Over 100,000 employees were impacted by AI-driven layoffs in 2025 alone, spanning tech, finance, logistics, and retail.
I’m not technical. Am I more at risk?
Not necessarily. At IgniteTech, the tech-savvy employees who resisted change were the most at risk. Your willingness to adapt is far more important than your current technical skill level.
What’s the first step I should take today?
Identify one repetitive task you do every week. Spend 30 minutes learning how a free AI tool could help. Could ChatGPT draft your emails? Could Gemini summarize meeting notes? Start small and build momentum.
Was what IgniteTech did ethical?
It’s legally complicated and ethically debated. Companies have the right to restructure, but firing 80% of your workforce raises serious questions about corporate responsibility. The growing government scrutiny of AI companies suggests this aggressive approach may face more backlash going forward.
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