This CEO fired about 80% of his employees because they refused to rapidly adopt AI. 2 years later, he says he would do it again

“In those early days, we got resistance, we were flat out, ‘Yeah, I’m not going to resist this,'” he said. “And so we said goodbye to those people.”

Vaughn was surprised it was mostly the technical staff, not marketing or sales, who dug in their heels. They were “the most resistant,” he said, expressing various concerns about what AI can’t do, rather than focusing on what it can do. Marketing and salespeople were excited by the possibilities of working with these new tools, he added.

This friction is borne out by extensive research. According to the 2025 Enterprise AI Adoption report by Writer, an agentic AI platform for enterprises, one in three workers say they have “actively sabotaged” their company’s AI rollout – a figure that rises to 41% of millennial and Gen Z employees. This can take the form of refusing to use AI tools, deliberately generating low-quality outputs or ignoring training altogether. Many acted out of fear that AI would replace their jobs, while others were frustrated by weak AI tools or unclear leadership strategies.

said Kevin Chung, chief strategy officer of the author fate The “big eye-opener” from this survey was the human element of AI resistance.

“This sabotage is because they are not afraid of technology,” he said. “There’s a lot of pressure to get it right, and then when something doesn’t work, you’re disappointed.”

He added that the author’s research shows that workers often don’t believe in where their organization is headed.

“When you’re handed something you don’t want, it’s very frustrating, so the sabotage starts, because then people are like, ‘Well, I’m going to run my own thing. I’m going to figure it out myself.’

Vaughn said he didn’t want to force anyone.

“You can’t force people to change, especially if they don’t believe,” he said, adding that belief was really what he needed to recruit.

Company leadership eventually realized that they would have to launch a massive hiring effort for what they called “AI innovation specialists.” This applies across the board: sales, finance, marketing, and elsewhere. Vaughan said the time was “really difficult” because things within the company were “upside down … we didn’t really know where we were or who we were.”

A few key hires helped, starting with Thibault Bridel-Bertomeu, who became IgniteTech’s chief AI officer. This led to a complete restructuring of the company which Vaughan called “somewhat unusual”. Essentially, each division came to report to the AI ​​organization, regardless of domain.

This centralization prevents duplication of effort and maximum knowledge sharing, said Vaughan, a common struggle in AI adoption, where the authors’ survey shows that 71% of C-suite AI applications at other companies are being created in silos and nearly half report leaving it to their employees to “figure out productive AI on their own.”

In response to this difficult change, IgniteTech reaped extraordinary results. By the end of 2024, the company had originally launched two patent-pending AI solutions, including a platform for AI-based email automation (Eloquens AI) with a revamped team.

Financially, IgniteTech remained strong. Vaughn revealed that the company, which he said is in the nine-figure revenue range, ends at “about 75% Ebitda” in 2024 — all while completing a major acquisition, Khoros.

“You multiply people … give people the ability to multiply themselves and do things at speed,” he said, pointing to the company’s ability to build new customer-ready products in as little as four days, a timeline unthinkable under the old regime. Over the months, Won said fate In a preliminary statement to 2026, the company has only increased its headcount, hiring globally for AI innovation experts in all functions from marketing to sales to finance and engineering to support.

What does Vaughn’s story say for others? On one level, this is a case study in the pain and payoff of radical change management. But his ruthless approach arguably addresses many of the challenges identified in the author survey: lack of strategy and investment, misalignment between IT and business, and failure to engage champions who can unlock the benefits of AI.

To be sure, IgniteTech is far from alone in wrestling with these challenges. Joshua Wöhle is CEO of Mindstone, a firm that provides AI upskilling services to workforces, training hundreds of employees monthly at companies including Lufthansa, Hyatt, and NBA teams. He recently discussed two approaches described by Vaughn – upskilling and mass replacement – in an appearance. BBC Business Today.

Wöhle contrasted the recent examples of Ikea and Klarna, with the former arguing why it is better to “reskill” existing employees. Klarna, a Swedish buy-now, pay-later firm, drew considerable publicity for its decision to cut members of its customer support staff in a pivot to AI, only to reassign them to similar roles.

“We’re close to the point where [AI is] Much wiser than most people who work knowledge. But this is exactly why growth beats automation,” Wöhle wrote on LinkedIn.

A Klarna representative said fate The company has not eliminated employees, but has instead adopted a multifaceted approach to its customer service, which is managed by outsourced customer service providers who are paid according to the amount of work required. The launch of an AI customer service assistant reduced the workload of 700 full-time agents — from about 3,000 to 2,300 — and third-party providers redeployed those 700 workers to other customers, according to Klarna. Now that the AI ​​customer service agent is “handling more complex questions than we started with,” Klarna says, that number has dropped to 2,200. Klarna says its contractor has rehired just two people in a pilot program designed to combine highly trained human support staff with AI to deliver superior customer service.

In an interview with fateWöhle said that one of his clients was very careless with his workers, ordering them to devote all Fridays to AI retraining, and if they did not report any of their work, they were invited to leave the company.

He said that firing workers resistant to AI could be “merciful”: “The pace of change is so fast that it’s kind of a pity to force people through it.” He added that if all his workers really loved learning, Mindstone could help make a real difference, but he discovered after training literally thousands of people that “most people hate learning. They’d avoid it if they could.”

Wöhle attributed AI resistance in the workforce to the tech sector’s “boy who rode wolf” problem, citing NFTs and blockchain as technologies billed as revolutionary but “not having the real impact” that tech leaders promised.

“You can’t really blame them” for resistance, he said. Most people “get stuck because they think first from their work flow,” he added, and they conclude that AI is overhyped because they want AI to fit into their old way of working. “It takes a lot of thought and a lot of motivation to change the way you work,” but once you do, you see dramatic growth. A human can’t possibly memorize five call transcripts when you’re trying to write a proposal to a client, he suggests, but AI can.

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

The authors report that companies with a formal AI strategy are more likely to succeed, and those that invest heavily in AI outperform their peers by large margins. But as Vaughn’s experience shows, investing without trust and buy-in can be a waste of energy. “Culture needs to be built. Ultimately, we had to go out and recruit and hire like-minded people. Changing minds was harder than adding skills.”

From the vantage point of early 2026, Vaughan reflected in a statement fateMonthly all-hands meetings aren’t what they used to be: “We destroyed the framework for reviewing goals and metrics. Now teams demo what they’ve built.” He wanted to emphasize another point: Despite the drastic measures he’s taken to restructure, he still doesn’t feel like he’s ahead of the curve.

“We haven’t run from behind yet,” he said. “The pace of change in AI is relentless. If we don’t push, keep learning every day, we’re toast.”

For Vaughan, there is no ambiguity. Will he do it again? He doesn’t hesitate: He’d rather build a new, AI-powered foundation than endure months of pain and let the organization sink into irrelevance.

“It’s not a technological change. It’s a cultural change, and it’s a business change,” he said, adding that he wouldn’t recommend others follow his lead and replace 80% of their employees.

“I don’t recommend it at all,” he said. “That wasn’t our goal. It was too difficult.”

But at the end of the day, he added, everyone should be in the same boat, rowing in the same direction. Otherwise, “we won’t get where we’re going.”

A version of this story was published on August 17, 2025 on Fortune.com.

This story was originally featured on Fortune.com