Silent Downsizing: IBM’s Recent Job Cuts and Future of AI.
Last year, IBM’s CEO Arvind Krishna indicated that the company projected a reduction of around 7,800 positions due to advancements in artificial intelligence (AI), although he did not provide a specific timeline for these changes.
Recently, reports have surfaced indicating that IBM is implementing significant layoffs, with thousands of employees affected in a discreet manner. According to The Register, sources within the company have described this round of layoffs as “massive,” particularly within the IBM Cloud division. Employees involved in these cuts were reportedly required to sign non-disclosure agreements, making the process unusually secretive. One employee shared, “My manager informed me that they had to sign an NDA regarding the details.”
While IBM has acknowledged the workforce reductions, it has downplayed their extent. In its first-quarter 2024 earnings report, the company revealed a $400 million charge for “workforce rebalancing,” indicating that these layoffs are part of a broader restructuring effort. An IBM representative stated, “Earlier this year, IBM announced a workforce rebalancing charge, which is expected to represent a very small percentage of our global workforce. We anticipate ending 2024 with a workforce size similar to what we started with.”
Despite the official figures, analysts suggest that the total number of job cuts could be significantly higher than IBM has disclosed, particularly when factoring in previous layoffs and the company’s current employee numbers. In a letter to the Employment Development Department (EDD), Lawrence Sposato, IBM’s U.S. director of human resources, confirmed a permanent workforce reduction at the company’s San Francisco office, further emphasizing the ongoing changes within the organization.
