Half of tech firms plotting restructures as AI hype bites

More than half of tech companies are considering a complete restructure and / or changing their operating model in response to AI, according to research from the consulting sector.

Looking at responses from consulting clients, research firm Source said that it found the changes had become a priority among the technology, media, and telecoms sector (TMT).

Using the research firm's database and interviews with 150 clients, Source found that 60 percent of those in the tech sector expect to invest in organizational restructuring in the next 18 months.

"TMT clients remain unconfident, but advances in AI and new technologies are triggering urgent discussions about business restructuring," the research said.

The study reveals around seven percent growth in global TMT consulting, reaching $8.25 billion. Growth last year was flat at two percent.

Tony Maroulis, principal consultant from Source Global Research, said that while the growth was not as high as in 2022, the market slowdown over the last two years has passed. "To a large extent, the crises and uncertainty faced by companies are factored into planning, and the resulting fiscal caution is gradually giving way to more ambitious investment plans," he said.

The research showed that while 60 percent of high-tech organizations were looking to restructure, 54 percent were looking to change their target operating model, and 60 percent were considering M&As.

"Some of these changes are likely to be induced by AI (organizational restructuring, digital transformation, and operating model transformation). The M&A plan is likely to be driven by a talent shortage," the report said.

"It is impossible to hide from the impact of AI. Few organizations - if any - do not have a roadmap for AI implementation, usually with the support of external help."

Improving tech infrastructure is the most talked-about discussion point for telecoms clients, while media clients are explicitly focusing on using emerging technologies, the research found.

The past year has seen a shake-out at tech companies as they implement AI. For example, Salesforce has slashed 4,000 customer support roles through the application of AI agents.

"I've reduced it from 9,000 heads to about 5,000 because I need less heads," CEO Marc Benioff told the media.

The company said that using Agentforce internally led to a decline in the number of support cases so that it no longer needed to actively backfill support engineer roles. "We've successfully redeployed hundreds of employees into other areas like professional services, sales, and customer success," a Salesforce spokesperson said. ®