This CEO dismissed almost 80% of his employees for not embracing AI quickly enough. Two years on, he states he would make the same decision again.

IgniteTech's Bold AI Transformation: A Leadership Gamble

Eric Vaughan, CEO of enterprise software leader IgniteTech, made a career-defining move when he recognized the sweeping impact of generative AI in early 2023. Viewing AI as a fundamental shift, Vaughan realized his team was not fully prepared to embrace this new direction. In response, he undertook a dramatic overhaul, ultimately replacing nearly 80% of the workforce within a year, according to data reviewed by Fortune.

Throughout 2023 and into early 2024, IgniteTech underwent significant staff changes, with hundreds of employees departing—though Vaughan declined to specify exact numbers. He described the process as extremely challenging, emphasizing that shifting mindsets proved more difficult than acquiring new expertise. Despite the hardship, Vaughan stands by his decision, convinced it was essential for the company's future.

Vaughan saw an urgent need for change where others saw opportunity. He believed that failing to adapt to AI could threaten even the most established companies. In a decisive move, he addressed his global remote team, announcing that AI would become the central focus of all operations. Employees were offered resources, training, and reimbursement for AI tools and courses, and external experts were brought in to foster enthusiasm for the technology.

Mondays at IgniteTech became known as "AI Mondays," with all staff—regardless of department—dedicating the day exclusively to AI projects. Routine tasks and customer calls were set aside to prioritize innovation and learning. Vaughan explained that building this new culture was crucial to the company's transformation.

Despite investing 20% of payroll into a company-wide learning initiative, the effort was met with widespread resistance and even sabotage. Vaughan discovered that fostering genuine belief in the new direction was far more challenging than simply providing training.

Facing Resistance: The Human Side of AI Adoption

Vaughan recounted that the strongest pushback often came from technical staff, who were skeptical about AI's capabilities, while sales and marketing teams were more receptive to the changes. This pattern aligns with findings from the 2025 Enterprise AI Adoption Report by Writer, which revealed that one in three employees admitted to actively undermining their organization's AI initiatives—a figure that rises to 41% among millennials and Gen Z. Resistance ranged from refusing to use AI tools to producing subpar results or skipping training, often driven by concerns about job security or dissatisfaction with the technology and leadership strategy.

Writer's Chief Strategy Officer, Kevin Chung, highlighted that this resistance is less about fear of technology and more about frustration with ineffective tools and unclear direction. Many employees, he noted, lose trust in their organization's vision and resort to creating their own solutions, leading to problematic "shadow IT."

Vaughan recognized that change cannot be forced on those who lack conviction. Ultimately, IgniteTech shifted its focus to recruiting "AI innovation specialists" across all departments, acknowledging that belief in the mission was as important as technical skills. The transition period was turbulent, with the company undergoing a complete reorganization under the guidance of new hires, including Chief AI Officer Thibault Bridel-Bertomeu. All divisions were restructured to report into the AI organization, streamlining efforts and enhancing knowledge sharing.

This centralized approach addressed common challenges in AI adoption, such as siloed projects and employees left to navigate generative AI independently—a problem reported by 71% of C-suite leaders in Writer's survey.

Transformation and Results: The Cost and Reward of Change

IgniteTech's radical transformation yielded significant outcomes. By the end of 2024, the company had introduced two patent-pending AI solutions, including Eloquens AI, a platform for automated email management, all while operating with a newly rebuilt team.

Financially, IgniteTech remained robust, with Vaughan reporting nine-figure revenues and an EBITDA margin close to 75% for 2024. The company also completed the acquisition of Khoros during this period.

Vaughan emphasized the company's newfound agility, noting that new products could be developed and brought to market in as little as four days—a pace previously unimaginable. By early 2026, IgniteTech was actively expanding its team, recruiting AI specialists worldwide across every business function.

Vaughan's experience serves as a case study in the challenges and rewards of bold organizational change. His uncompromising approach addressed many issues highlighted in the Writer survey, including lack of strategy, insufficient investment, and the need for internal champions to drive AI adoption.

Lessons from the Field: Reskilling vs. Replacement

IgniteTech's journey is not unique. Joshua Wöhle, CEO of Mindstone, a company specializing in AI upskilling, contrasted Vaughan's approach with that of other organizations on BBC Business Today. He pointed to Ikea as an example of successful reskilling, while Klarna, after reducing its customer support staff in favor of AI, ended up rehiring for similar roles.

Klarna clarified that it did not lay off employees but instead shifted work to outsourced providers, who reassigned staff as AI reduced the workload. The company now combines highly trained human agents with AI to deliver superior customer service.

Wöhle shared that some companies require employees to dedicate specific days to AI training, with non-participants asked to leave. He argued that, given the rapid pace of change, it can be more compassionate to let go of those unwilling to adapt. After training thousands, he observed that most people resist learning unless absolutely necessary.

He attributed much of the workforce's skepticism to previous tech trends—like NFTs and blockchain—that failed to deliver on their promises. Many employees struggle to see how AI fits into their established workflows, leading to resistance until they experience the benefits firsthand.

Ikea echoed this sentiment, stating that its AI strategy focuses on enhancing human work rather than replacing jobs, allowing employees to focus on more meaningful tasks.

The Writer report found that companies with clear AI strategies and significant investment outperform their peers. However, as Vaughan's experience demonstrates, investment alone is not enough—building a culture of belief and engagement is essential.

Looking Ahead: The Relentless Pace of AI

By early 2026, IgniteTech's all-hands meetings had shifted from reviewing metrics to showcasing new innovations. Vaughan stressed that, despite the sweeping changes, he does not consider himself ahead of the curve. The rapid evolution of AI means that constant learning and adaptation are necessary to stay competitive.

Vaughan is unequivocal about his approach: he would rather endure the difficulties of rebuilding than risk the company becoming obsolete. He views the transformation as not just a technological shift, but a fundamental change in culture and business operations. However, he cautions others against following his path of replacing most of the workforce, acknowledging the immense difficulty involved.

Ultimately, Vaughan believes that unity of purpose is critical—everyone must work together toward a shared goal to achieve success.

Further Reading on AI in the Workplace

• AI is boosting productivity: Exploring why some employees experience a sense of loss amid rising efficiency.
• AI adoption isn’t an easy way to cut jobs: Insights from a Wharton professor on the complexities of implementing AI in the workplace.
• AI layoffs are looking more and more like corporate fiction: Oxford Economics examines the realities behind AI-related workforce changes.

This article was originally published on Fortune.com.