IBM is once again planning to reduce its global workforce due to artificial intelligence and enterprise software. The company did not specify how many roles would be affected but described the move as targeting a “low single-digit percentage” of its employee base.
Considering how IBM had approximately 270,000 people worldwide at the end of last year, even firing 5% of its workforce would mean letting go of over a whopping 13,000 people. This comes soon after the tech giant hired a multitude of workers to fill its AI roles.
While cuts are expected globally, a spokesperson said that the number of employees in the United States is likely to remain steady. The company referred to the decision as part of its regular “workforce rebalancing” efforts, where certain roles are phased out while others are added based on shifting business priorities.
IBM did not disclose the financial impact of severance payments related to the layoffs.
The job reductions come as IBM increases its investment in AI consulting and software services, areas it sees as critical to long-term growth. The company joins other major tech firms, including Amazon, Google, and Meta, that have made similar staffing cuts to support AI development.
Though executives across the industry have praised AI’s potential to improve efficiency, particularly in tasks like coding and automation, the commercial returns remain uncertain. Some analysts have warned that the market may be moving too quickly, raising concerns of a possible bubble.
IBM recently reported strong third-quarter earnings, with revenue rising 9% to $16.33 billion, exceeding analyst expectations. On a recent earnings call, Chief Financial Officer Jim Kavanaugh said adoption of AI among large businesses is accelerating. He noted that around 80% of IBM’s AI consulting and software customers in the past six months were new clients.
The company recorded $9.5 billion in AI-related bookings in the quarter, according to a report from Jefferies, which described the growth as a sign of “strong momentum in AI-driven demand.”