The big picture: The layoff plan underscores how aggressively Big Blue is betting on automation, consulting, and quantum computing to define its next decade. It also marks the latest step in IBM's years-long effort to streamline legacy operations and refocus its workforce on the higher-margin segments driving future growth.
IBM is planning another round of staff reductions as it deepens its shift toward artificial intelligence and high-margin software services. The company said the cuts will affect a low single-digit percentage of its global workforce, which totaled roughly 270,000 employees at the end of 2024. While precise numbers were not disclosed, IBM described the measures as part of an ongoing "rebalancing" aimed at aligning employee skills with growth areas such as AI consulting, cloud computing, and quantum research.
A spokesperson said the overall number of US-based workers is expected to remain stable despite some job eliminations elsewhere. IBM did not specify the financial charge associated with severance payments. The announcement comes as major technology employers continue to trim corporate headcounts while investing heavily in AI infrastructure.
Across the industry, companies including Amazon, Meta, and Google have also reduced staff this year amid a broad reshaping of the white-collar job market. At the same time, Big Tech firms are committing billions of dollars to expand data centers, GPU capacity, and software platforms supporting the next generation of machine learning models.
IBM Chief Executive Arvind Krishna recently said the company has replaced work previously performed by several hundred human resources employees with AI "agents." The redeployment, he added, allowed IBM to shift hiring toward programmers, data scientists, and client-facing sales roles – underscoring the company's internal push to embed automation throughout its operations.
The restructuring follows solid financial results. For the quarter ending in September, IBM reported revenue of $16.33 billion, a nine percent increase from a year earlier and above analysts' forecasts. Bookings for AI consulting and software rose to $9.5 billion, reflecting what investment bank Jefferies described as "strong momentum" in AI-driven enterprise demand.
CFO Jim Kavanaugh told investors that roughly 80 percent of clients who purchased AI consulting or software in the past six months were new to IBM. He noted that mainstream corporations are now integrating machine learning and generative AI tools directly into production systems rather than experimental pilots.
IBM has steadily narrowed its focus under Krishna, who took the helm in 2020. One of his first major moves came a year later with the spin-off of Kyndryl, the infrastructure and IT services unit that managed legacy computing systems. The separation allowed IBM to concentrate on scalable cloud platforms, AI consulting, and advanced computing initiatives.
Among its most ambitious projects is the development of a commercially viable quantum computer capable of outperforming traditional hardware in processing power. IBM is competing with Google, Microsoft, and several startups to build larger clusters of quantum chips that can achieve reliable, fault-tolerant computation within the next five years. Success in that field could transform forecasting, logistics, and materials science – areas where conventional computing remains constrained.
Despite optimism surrounding AI's growth potential, analysts caution that many companies have yet to generate consistent revenue from generative tools such as chatbots and code-assistance systems. For IBM, the longer-term challenge will be maintaining profitability while investing heavily in high-performance computing, data infrastructure, and AI-enabled software to serve an evolving client base.
IBM cuts thousands of jobs as it pushes deeper into AI and cloud computing
