Effective adjustment of labor cost is a crucial factor for enterprises to build competitive advantages in the digital and intelligent era. Different from the research perspective of aggregating all digital transformation-related word frequencies, the panel data of A-share listed companies in Shanghai and Shenzhen from 2007 to 2023 in China was utilized. By constructing an index of the upgrade from informatization and digitalization to intelligentization in enterprise digital transformation, the dynamic impact and its mechanism of enterprise intelligent upgrade on labor cost were empirically examined. The results show that in the early stage of digital transformation, informatization and digitalization will increase labor cost. When further upgrading to intelligentization, enterprise intelligent upgrade can significantly reduce labor cost. The mechanism test shows that the adjustment of human capital structure and employment scale is an important reason for the dynamic adjustment of labor cost affected by enterprise intelligent upgrade. The heterogeneity analysis indicates that for private enterprises and those in the growth and decline stages, the effect of enterprise intelligent upgrade in reducing labor cost is more prominent. These offers policy inspiration for facilitating the intelligent upgrade of enterprises, alleviating the pressure from the rising labor costs, and realizing high-quality enterprise development.