Introduction
IBM announced global workforce reductions in the fourth quarter of 2024, affecting between one and two percent of its global headcount. The layoffs are part of a broader industry strategy to boost productivity through artificial intelligence and automation.
Scale and Impact of Job Cuts
With 270,000 employees at the end of 2024, a 1% workforce reduction would represent approximately 2,700 jobs lost. According to an IBM spokesperson, the action will impact "a low single-digit percentage of our global workforce" in Q4. While some U.S.-based roles are affected, IBM anticipates that U.S. employment will remain flat year over year.
The Strategy Behind the Layoffs
The cuts reflect a deliberate repositioning of human capital toward high-value roles, replacing routine functions with AI-driven solutions. In May 2024, CEO Arvind Krishna revealed to The Wall Street Journal that AI agents had assumed the work of approximately 200 human resources employees, allowing the company to hire more salespeople and software developers.
Industry Context: A Consolidated Trend
IBM is not alone in this direction. The technology sector is undergoing a consolidation phase through strategic layoffs. In October 2024, Amazon announced 14,000 corporate job cuts, while Meta eliminated 600 positions from its AI unit. These moves reflect a shared priority: maximize productivity by integrating AI tools into business processes.
IBM's Financial Performance
Despite the layoffs, IBM continues to deliver solid results. In October 2024, the company beat earnings expectations, driven by a 10% surge in software revenue. Under CEO Arvind Krishna, who replaced Ginni Rometty in 2020, IBM has expanded and diversified its revenue base, with growing focus on cloud solutions and artificial intelligence.
Implications for the Tech Industry
This cycle of workforce reduction reflects a structural shift in the technology sector. Companies are not merely cutting costs but reshaping organizational structures to leverage AI's full potential. The goal is to allocate resources toward higher-value activities: software development, business relationships, research, and innovation.
IBM's History of Organizational Changes
IBM has a long history of strategic restructuring. In March 2024, the company had already laid off some marketing and communications staff. These gradual adjustments demonstrate how IBM is progressively transforming its workforce from a traditional structure to one powered by automation and artificial intelligence.
FAQ
How many jobs will IBM lose with the announced layoffs?
With a 1% reduction in global workforce, IBM could lose approximately 2,700 to 3,000 jobs in Q4 2024. However, the company clarified that the cut would be "a low single-digit percentage," so it may range between 1% and 2%.
Why is IBM conducting layoffs if financial performance is positive?
The layoffs reflect a structural optimization strategy rather than financial distress. IBM uses artificial intelligence to automate repetitive processes and redistribute human resources toward high-value roles in sales, software development, and innovation.
How does artificial intelligence influence layoff decisions in the tech industry?
AI enables companies to automate administrative and operational functions. In IBM's case, AI agents replaced approximately 200 human resources staff, demonstrating how automation reduces the need for personnel in routine tasks.
Which other tech giants are conducting similar layoffs?
Amazon announced 14,000 corporate job cuts and Meta eliminated 600 positions in its AI division. This trend shows how the industry is converging on efficiency strategies based on automation and artificial intelligence.
Will IBM maintain the same employment level in the United States?
Yes, according to the official spokesperson, IBM expects U.S. employment to remain flat year over year, despite some U.S. roles being affected by global cuts. The reduction will be offset by new hires in strategic areas.
What was IBM's last organizational adjustment before this announcement?
In March 2024, IBM had already conducted layoffs in marketing and communications departments. This demonstrates a pattern of progressive restructuring aimed at transforming the workforce composition toward tech-focused roles.