IBM cuts jobs as it shifts focus to AI

IBM’s chief communications officer Jonathan Adashek told staff of the cuts in a seven-minute staff meeting with the unit, a person familiar with the matter told CNBC. It is currently unclear how many people IBM plans to let go at this time.

“In 4Q earnings earlier this year, IBM disclosed a workforce rebalancing charge that would represent a very low single digit percentage of IBM’s global workforce, and we expect to exit 2024 at roughly the same level of employment as we entered with,” a company spokesperson told Quartz in a statement.

IBM’s focus on AI

The statement continued, “This rebalancing is driven by increases in productivity and our continued push to align our workforce with the skills most in-demand among our clients, especially areas such as AI and hybrid cloud.” During the company’s fourth-quarter earnings call in January, IBM announced that it planned to lay off 1.5% of its global workforce.

CFO James Kavanaugh then told Bloomberg that figure represented about 3,900 jobs. Kavanaugh added that the company still expected to hire in “higher-growth areas.” In May 2023, IBM CEO Arvind Krishna said the company could replace nearly 8,000 of its back-office roles like human resources with AI in the next five years.

The tech layoff carnage continues

IBM adds to the nearly 50,000 layoffs in the tech sector in just the first three months of 2024. Tech giants like Google-parent Alphabet, Microsoft, and Amazon all announced job cuts in 2024. More recently, they were joined by Sony, Bumble, and Expedia.