Business Brief
Workplace benefits face cuts as costs rise
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The era of ever-expanding workplace perks is ending. It's not just free kombucha and laundry — policies like paid parental leave and retirement matches are on the chopping block.
Why it matters: Corporate America spent the labor-shortage years competing to offer the most generous workplace benefits. Now, with health-care cost soaring, workers leverage shrinking and an AI reckoning, some employers are rolling them back.
The big picture: First it was the return to the office. Now benefits that became standard during COVID and workforce shortages — from fertility subsidies to 401(k) matches — appear on shakier ground in an era dominated by AI spending and rising health costs.
What's happening: Deloitte and Zoom are among the largest companies to grab headlines recently with pullbacks on family leave. Deloitte sought to "better align with the marketplace," and it's also trimming vacation time and ancillary health perks like fertility support.
- TTEC, a customer experience technology firm, told Business Insider last month that it paused 401(k) matching for U.S. employees this year in part due to spending on AI tools, automation and training.
Zoom out: A quiet pullback is coming from companies large and small across the country, as economic and labor market realities are undergoing a drastic shift.
- Experts are largely blaming cuts on double digit year-over-year jumps in their health benefit costs.
- "I think reality is setting in," said Rich Fuerstenberg, a senior partner on Mercer's Health & Benefits Practice referring to companies need to reevaluate the total benefits they can truly afford. "There's more scrutiny, and it's 'Why are we over market? What am I getting from these programs?'"
By the numbers: A survey of 500 U.S. business leaders by ResumeBuilder.com conducted in March found more than half indicated they were cutting back benefits (53%) as well as bonuses (61%) and raises (53%) to help fund AI investments.
- A Mercer 2026 CFO Perspective on Health survey found 38% of chief financial officers said they are cutting back benefits elsewhere because of the jump in health costs in the past two years.
Drug spending alone jumped from 21% of companies' total health care spending to 24% in a three year period, said Jim Winkler, chief strategy officer for the Business Group on Health.
- "Health care costs, which feel out of control, are squeezing out other benefits that are for which you have greater control," Shawn Gremminger, CEO of the National Alliance of Healthcare Purchaser Coalitions.
Between the lines: Benefits consultants say white collar workers may simply be in less of a position to demand perks when AI appears more capable of replacing at least some of the workforce.
- It's a reversal for the flashy days of the tech boom where companies raced to recruit and retain key talent with perks that extended to meals, massages and in-house fitness centers.
- The tech industry specifically has seen major cutbacks in perks culture and layoffs.
Reality check: Companies still need high skilled workers and generally try to maximize their benefits to attract top talent and retain them. But that equation is getting harder to make work.
The bottom line: For workers who keep their jobs, the next workplace reset may hit the benefits people actually plan their lives around.