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

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

Over the course of 2023 and into the first quarter of 2024, Vaughan said Ignite replaced hundreds of employees, declining to disclose a specific number. “That was not our goal,” he told Fortune. “It was extremely difficult … But changing minds was harder than adding skills.” It was, by any measure, a brutal reckoning—but Vaughan insists it was necessary, and says he’d do it again

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. “We’re going to give a gift to each of you

And that gift is tremendous investment of time, tools, education, jects … to give you a new skill,” he explained

The company began reimbursing for AI tools and mpt engineering classes, and even brought in outside experts to evangelize. “Every single Monday was called ‘AI Monday,'” Vaughan said, with his mandate for staff that they could only work on AI. “You couldn’t have customer calls, you couldn’t work on budgets, you had to only work on AI jects.” He said this happened across the board, not just for workers, but also for sales, marketing, and everybody at Ignite. “That culture needed to be built

Belief, Vaughan discovered, is a hard thing to manufacture. “In those early days, we did get resistance, we got flat-out, ‘Yeah, I’m not going to do this’ resistance

And so we said goodbye to those people.” The pushback: Why didn’t they get on board? Vaughan was surprised to find it was often the nical staff, not marketing or sales, who dug in their heels

They were the “most resistant,” he said, voicing various concerns what the AI couldn’t 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

This friction is borne out by broader re

This can take the form of refusing to use AI tools, intentionally generating low-quality outputs, or avoiding training altogether

Many act out due to fears that AI will replace their jobs, while others are frustrated by lackluster AI tools or un strategy from leadership

WRITER’s Chief Strategy Officer Kevin Chung told Fortune the “big eye-opening thing” from this survey was the human element of AI resistance. “This sabotage isn’t because they’re afraid of the nology … It’s more there’s so much pressure to get it right, and then when you’re handed something that doesn’t work, you get frustrated.” He added that WRITER’s re shows that workers often don’t trust where their organizations are headed. “When you’re handed something that isn’t quite what you want, it’s very frustrating, so the sabotage kicks in, because then people are , ‘Okay, I’m going to run my own thing

I’m going to go figure it out myself.'” You definitely don’t want this kind of “shadow IT” in an organization, he added

Vaughan says he didn’t want to force anyone. “You can’t compel people to change, especially if they don’t believe.” He added that belief was really the thing he needed to recruit for

Company leadership ultimately realized they’d have to launch a massive recruiting effort for what became known as “AI Innovation Specialists.” This applied across the board, to sales, finance. marketing, everywhere

Vaughan said this time was “really difficult” as things inside the company were “upside down … We didn’t really quite know where we were or who we were yet.” A couple key hires helped, starting with the person who became Ignite’s chief AI officer, Thibault Bridel-Bertomeu

That led to a full reorganization of the company that Vaughan called “somewhat unusual.” Essentially, every division now reports into the AI organization, regardless of domain

Financially, Ignite remained strong

Vaughan disclosed that the company, which he said is in the nine-figure revenue range, 2024 at “near 75% EBITDA”—all while completing a major acquisition, Khoros. “You multiply people … give people the ability to multiply themselves and do things at a pace,” he said, touting the company’s ability to build new customer-ready ducts in as little as four days—an unthinkable timeline in the old regime

What does Vaughan’s story say for others? On one level, it’s a case study in the pain and payoff of radical change management

But his ruthless apach arguably addresses many challenges identified in the WRITER survey: lack of strategy and investment, misalignment between IT and , and the failure to engage champions who can unlock AI’s benefits

The ‘boy who cried wolf’ blem To be sure, Ignite is far from alone in wrestling with these challenges

Joshua Wöhle is the CEO of Mindstone, a firm similar to WRITER that vides AI upskilling services to workforces, training hundreds of employees monthly at companies including Lufthansa, Hyatt, and NBA teams

He recently discussed the two apaches described by Vaughan—upskilling and mass replacement—in an appearance on BBC Today

Wöhle contrasted the recent examples of Ikea and Klarna, arguing the former’s example shows why it’s better to “reskill” 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. “We’re near the point where [AI is] more intelligent than most people doing knowledge work

But that’s precisely why augmentation beats automation,” Wöhle wrote on LinkedIn

A representative for Klarna told Fortune the company did not lay off employees, but has instead adopted several apaches to its customer service, which is managed by outsourced customer-service viders 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—from roughly 3,000 to 2,300—and the third-party viders redeployed those 700 workers to other clients, according to Klarna

Klarna says its contractor has rehired just two people in a pilot gram designed to combine highly trained human support staff with AI to der outstanding customer service

In an interview with Fortune, Wöhle 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’t report back on any of their work, they were invited to leave the company

He said it can be “kinder” to dismiss workers who are resistant to AI: “The pace of change is so fast that it’s the kinder thing to force people through it.” He added that he used to think that 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 “most people hate learning

They’d avoid it if they can.” Wöhle attributed much of the AI resistance in the workforce to a “boy who cried wolf” blem from the sector, citing NFTs and blockchain as nologies that were billed as revolutionary but “didn’t have the real effect” that leaders mised. “You can’t really blame them” for resisting, he said

Most people “get stuck because they think from their work flow first,” he added, and they conclude AI is overhyped because they want AI to fit into their old way of working. “It takes a lot more thinking and a lot more kind of dding for you to change the way that you work,” but once you do, you see dramatic increases

A human can’t possibly keep five call transcripts in their head while you’re trying to write a posal to a client, he offers, but AI can

Ikea echoed Wöhle when reached for , saying that its “people-first AI apach focuses on augmentation, not automation.” A spokesperson said Ikea is using AI to automate tasks, not jobs, freeing up time for value-added, human-centric work

The WRITER report notes that companies with formal AI strategies are far more ly to succeed, and those who heavily invest in AI outperform their peers by a large margin

But, as Vaughan’s experience shows, investment without belief and buy-in can be wasted energy. “The culture needed to be built

Ultimately, we up having to go out and recruit and hire people that were already of the same mind

Changing minds was harder than adding skills.” For Vaughan, there’s no ambiguity

Would he do it again? He doesn’t hesitate: He’d rather endure months of pain and build a new, AI-driven foundation from scratch than let an organization drift into irrelevance. “This is not a change

It is a cultural change, and it is a change.” He said he doesn’t recommend that others his lead and swap out 80% of their staff. “I do not recommend that at all

That was not our goal

It was extremely difficult.” But at the end of the day, he added, everybody’s got to be in the same boat, rowing in the same direction

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