Companies Slash Employee Training Budgets by $126K as AI Budgets Soar

New research reveals more than half of U.S. companies would sacrifice employee skill development to fund AI. Those that have already cut learning and development budgets have reduced them by $126,000 on average, while AI budgets soar.

Worldwide spending on artificial intelligence (AI) is forecast to reach $2.59 trillion in 2026, and companies are already cutting compensation, freezing salaries, and reducing headcount to bankroll it. 

Experts at Careerminds surveyed 600 full-time U.S. HR leaders responsible for their company’s training budget and found that learning and development opportunities are shrinking at a time when employees need them most. As workers face growing pressure to upskill and adapt to AI, nearly half are paying for their own upskilling out of pocket.

Key findings:

• Companies that cut training budgets reduced them by an average of $126,000 a year, and almost half (47.1%) of those same companies increased their AI spending simultaneously. 

• 79% of companies increased AI and automation spend in the past year, adding an average of $88,000, with 1 in 5 (21.7%) adding over $100,000.

• More than half (53.7%) of HR leaders say their company would accept slower employee skill development in exchange for greater AI investment.

• 81.5% of HR leaders believe AI can replace some or all of the training and coaching their company previously paid for.

• Nearly half (47.8%) of U.S. workers spent their own money on upskilling in the past year, averaging $788 per person.

  
  

Together, the findings suggest a quiet shift in corporate priorities: training budgets are shrinking while AI investments grow, leaving more employees left to fund their own professional development.

Amanda Augustine, Certified Professional Career Coach and resident career expert at Careerminds, said:

“Many companies are making a calculated decision: they're betting that AI can take over some of the training and coaching they previously funded through their learning and development budgets. Our data finds that more than half of HR leaders say their organizations would accept slower employee skill development in exchange for greater AI investment.

"However, the risk here is that AI doesn't necessarily eliminate the need for learning; rather, it changes it. Employees still need training to use these tools effectively, apply sound judgment, and adapt as their roles evolve. Organizations that invest heavily in AI without continuing to invest in their people may ultimately limit the return they're hoping to achieve.

"In addition, our findings revealed that nearly half of workers paid for professional development themselves over the past year, and many say they're doing it to remain competitive or prepare for their next opportunity. When employees feel they have to invest in their own future because their employer won't, organizations risk developing talent that ultimately benefits someone else."

The full blog post, including survey methodology, can be read here and offers the following insights:

Companies are cutting training: The average cut among training budgets was $126,000 a year. More than half (55.9%) of companies cut over $25,000 from annual training spend, nearly a third (29.4%) cut more than $100,000, and almost half of those same companies (47.1%) increased their AI spending over the same period. 

AI budgets are soaring: 79% of companies increased AI and automation spend in the past 12 months, with a third (33%) describing the increase as significant. Among companies spending more, the average increase was $88,000 a year, 42% raised AI budgets by $50,000 or more, and more than 1 in 5 (21.7%) added over $100,000 in new AI spending alone.

Companies believe AI can replace training: The majority (81.5%) say AI can replace at least some of the training and coaching their company previously paid for, and 15.8% believe it can be fully replaced. Only 17.2% say AI cannot replace the training their company pays for.

The trade-off of upskilling for AI is already happening: More than half (53.7%) of HR leaders say their company would accept, or has already accepted, slower employee skill development in exchange for greater AI investment. In addition, 38.5% say their company would make that trade, 15.2% say they already have, and only a third (34.3%) say their company would not. 

Workers are footing the bill for their own development: Nearly half (47.8%) of U.S. workers spent an average of $788 of their own money on upskilling in the past 12 months. A further 27.3% plan to spend their own money within the next year, meaning three in four (75.2%) U.S. workers have invested in their own development or intend to. 

Much of that investment is defensive, and a quarter is headed for the exit: More than two-fifths (41.8%) of self-funders are upskilling in the hopes of a promotion at their current company, but one in five (22%) say they are upskilling in the hopes of holding onto their current job in the face of AI changes. More than a quarter (26.5%) are intent on taking their newfound skills elsewhere, with 22.0% seeking a better-paid job and 4.5% wanting to change careers entirely.

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Careerminds is a global workforce solutions provider delivering career transition, workforce design, and talent development to organizations worldwide. Our consumer career brands extend that reach, giving individuals AI-powered career tools and coaching at every stage of the career journey. Together, we combine technology, data, and human expertise to create a connected ecosystem that supports both workforce transformation and individual career success. Follow us on LinkedIn, Facebook, Instagram, X, and YouTube.

Amanda Augustine is the resident career expert for Careerminds, career.io, and its suite of brands: resume.io, TopResume, TopCV, TopInterview, Resume.ai, and others. As a Certified Professional Career Coach (CPCC) and a Certified Professional Resume Writer (CPRW), she has spent more than 20 years helping professionals improve their careers and land the right job sooner. Connect with Amanda on LinkedIn, X, Instagram, and Facebook.