Employee benefits are there in the spotlight this week with three recent stories about US companies cutting non-wage compensation for employees.
A Texas consulting firm with a memorable name – TTEC – suddenly became much more memorable when it suspended its discretionary 401(k) match program for 16,000 employees until at least the end of 2026. According to Business expertwho reviewed an internal TTEC memo, the company plans to invest in AI certifications, AI tools and training, and automation, among other things.
It is also the auditing and consulting giant Deloitte apparently cuts benefits for some employees from next year. This includes limiting PTO, halving parental leave and eliminating the $50,000 reimbursement for family planning services such as adoption, surrogacy and in vitro fertilization. Meanwhile, San Francisco-based Zoom made a smaller-scale change and shortened parental leave for employees from 22 weeks to 18 weeks for birthing parents.
So what is the driving force behind this phenomenon? Are more cuts coming? The latter is impossible to answer, and the former is unfortunately more complicated than “corporate ghouls are switching to artificial intelligence.”
First, “what Deloitte did is completely unconscionable,” says Joan C. Williams, a law professor at the University of California, San Francisco, author of several books on work culture and class dynamics, and an oft-cited scholar on these issues. A consulting firm restricts the benefits of a specific class of internal employees – in administration, IT support, and finance – while leaving benefits intact for customer-facing employees. The affected employee’s parental leave will be reduced from 16 weeks to just eight weeks.
“It treats people differently depending on the type of job they do, and reducing every mother to eight weeks of paid leave is just bizarre,” Williams says. “When labor is scarce, employers are more generous. But when power changes, benefits decline.”
Artificial intelligence is certainly now a convenient excuse for any corporate decision that harms employees. But the impetus here is also the cost of the benefits themselves. Earlier this year, Affordable Care Act subsidies expired and people began to opt out of health care plans altogether. Insurers quote this as one of the reasons they raised premiums.
Sarahjane Sacchetti, a former CEO at benefits administration firms Cleo and Collective Health who is working on a modern health care initiative, told me that the costs of employer-sponsored health plans have increased significantly over the past five years. A survey of more than 1,700 U.S. employers conducted last year by health care consulting group Mercer found that health care costs per employee would augment by an average of 6.5% in 2026, the most since 2010. This was after cost-cutting measures were taken into account; otherwise, the cost of the plan would augment by almost 9 percent.
“This is starting to impact the way you think about total compensation as an employer,” Sacchetti says. That doesn’t mean the corporation is a “good guy,” he says, but America’s penniless health care policy and lack of a safety net are responsible for much of the stress that plagues workers who are underpaid or laid off.
Williams points out that the United States is one of the few countries that does not offer federal paid maternity leave, which puts it in league with Papua Novel Guinea and Suriname. “It just goes to show how crazy it is to provide workers with basic benefits like pensions and paid parental leave through private employers and not the way other industrialized countries do it,” Williams says. Her proposed solution? “The United States must join the rest of the universe.”
The irony, of course, is that the US government claims to be obsessed with women having more children. If U.S. women are, as noted physician Mehmet Oz put it this week in the Oval Office, “immature,” a comprehensive federal paid leave policy would be an obvious place to start. (Oz also said that “making babies” is ” the most creative thing the universe knows” Don’t tell that to AI CEOs.)