IBM cuts 8,000 jobs in workforce shake-up, then quietly boosts headcount in AI drive

IBM has laid off approximately 8,000 employees, primarily from its human resources division, in a sweeping workforce rebalancing drive.

The move underscores a significant evolution at the New York-based tech giant, where the convergence of artificial intelligence (AI), global talent strategy, and new workplace policies is reshaping the very foundation of its operations.

While the headlines focus on the scale of the layoffs, as reported by The Week on Thursday (May 22), a closer look reveals a strategic pivot rather than mere cost-cutting.

IBM’s decision reflects how AI is not just an efficiency tool — it’s actively redefining organisational structures and the nature of work itself.

At the heart of this transition is AskHR, IBM’s proprietary AI platform, designed to automate routine HR functions such as processing vacation requests, managing payroll, and handling employee documentation.

In 2024 alone, AskHR handled 94% of these administrative interactions, totaling 11.5 million engagements and contributing an estimated $3.5 billion in global efficiency gains across more than 70 job functions.

The platform’s success has significantly reduced the need for human involvement in these traditionally labor-intensive tasks.

However, IBM insists this is not a case of "AI replacing jobs" in a vacuum.

Despite the layoffs, the company’s total workforce has reportedly grown.

CEO Arvind Krishna emphasised in a recent Wall Street Journal interview that AI-driven productivity has enabled IBM to reinvest in areas requiring uniquely human skills—such as software engineering, sales, and marketing—where emotional intelligence, creativity, and strategic thinking remain irreplaceable.

Yet, AskHR’s 94% automation rate also reveals its limitations: around 6% of queries still require human intervention, particularly in nuanced or complex scenarios.

This highlights the continued importance of human oversight and interaction, even in an increasingly automated workplace.

IBM’s restructuring is therefore more a realignment of talent than a simple downsizing.

This aligns with broader industry trends: routine and automatable roles are being phased out, while demand is rising for professionals who can design, deploy, and manage AI systems.

It’s a calculated step toward becoming “future-ready” in a rapidly evolving technological landscape.

Beyond AI, IBM’s workforce changes are influenced by other significant factors. Reports suggest a shift in employment focus toward India, leveraging the country’s deep talent pool and comparatively lower operating costs.

This has led to notable reductions in US-based roles.

Though IBM’s CFO maintains that these changes are consistent with past workforce rebalancing efforts, the combination of AI integration, geographic reallocation, and new workplace expectations points to a company undergoing profound transformation.

IBM’s ambitions extend far beyond internal restructuring. The company is making aggressive investments in AI and cloud computing, with platforms like WatsonX designed to empower other businesses to build their own AI tools.

IBM’s challenge now lies in managing the human side of this revolution: reskilling displaced workers, communicating transparently, and strategically hiring for high-value, human-centric roles.

IBM’s transformation offers both a cautionary tale and a strategic roadmap. Automation will undoubtedly eliminate certain jobs—but it also creates opportunities for more resilient, future-oriented roles.

The key lies in redesigning work to align with business value, and acknowledging the enduring importance of human creativity, insight, and connection.

In parallel with its workforce changes, IBM has also unveiled its latest mainframe system — the z17 — as part of its infrastructure strategy.

The z17 is designed to process AI workloads directly on customer-owned servers, reflecting a shift toward hybrid models that blend cloud and on-premises computing.

Unlike cloud-based platforms from providers like Amazon Web Services, Microsoft Azure, or Google Cloud, IBM’s mainframes offer companies more control over sensitive data.

IBM's hybrid approach, is seen becoming the industry norm as some clients are just obsessed with owning their data, ensuring it stays secure and accurate.