Eric Vaughan told nearly 80% of his employees to leave because they wouldn't use AI. He says he'd do it again in a heartbeat.
Vaughan is the CEO of IgniteTech, a Texas-based enterprise software company. In early 2023, he introduced something called "AI Monday" — a mandatory day every week where nobody could take customer calls, work on budgets, or do anything but AI projects.
Most of the staff pushed back. Some openly refused.
"We said goodbye to those people," Vaughan told The Economic Times. "Would I do it again? Absolutely."
He's since described the move as a matter of survival, saying he believes every company is facing an existential threat from AI-driven transformation. He claims the remaining 20% of his workforce has maintained or exceeded previous output.
Vaughan's approach is extreme, but the impulse behind it is everywhere. Outplacement firm Challenger, Gray & Christmas found that companies across tech are shifting budgets toward AI at the expense of headcount, while separate studies from Stanford and Harvard show coding roles taking the biggest hit.
That confidence hasn't translated broadly. According to an MIT study of 153 senior leaders and over 300 AI initiatives, 95% of enterprise AI solutions fail to reach production and deliver zero return. The tech works in demos. It struggles with real work.
Klarna found that out firsthand. The fintech company went all-in on AI to replace customer service roles, then publicly admitted that cost had been "a too predominant evaluation factor," resulting in "lower quality."
Kathy Ross, a senior director analyst at Gartner, pushed back further on the idea that these layoffs prove AI is actually working. "AI might have played a role, but they're not a result necessarily of AI successes," she told Business Insider. "Instead, the layoffs seem to be part of a broader strategy to reinvest funds in AI, hoping for success down the line."
The real risk with a story like Vaughan's isn't that he's wrong — it's that he becomes a template. When other CEOs read the headline and decide that gutting headcount is the move, most of them won't have spent a year on "AI Mondays" before pulling the trigger. Klarna already showed what happens when the math doesn't hold. The AI workforce transformation is real, but right now the gap between CEO confidence and actual AI results is wider than anyone in the corner office wants to admit.
