IBM announces cuts of thousands of jobs, aligning itself with other US Big Tech companies, notably Amazon, which have initiated massive layoffs thanks to the use of artificial intelligence. A move that helps US technology companies reduce costs and regain competitiveness in a highly competitive sector. However, the company active in hardware and software has not exactly quantified the cuts, speaking generically of a small percentage of its current workforce.
The possible size of the cuts
IBM has announced that it will lay off “a single-digit percentage” of its workforce in the current quarter.
“We are implementing an action in the fourth quarter that will impact a single-digit percentage of our global workforce”
a spokesperson told CNBC, adding that the cut
“it will have repercussions on some roles in the United States”, but “it will keep the employment rate in the USA unchanged”.
Based on the latest annual report, IBM employed 270,000 people at the end of 2024. Therefore, a headcount cut of just 1% would represent a loss of 2,700 jobs, but anything higher risks driving these numbers higher.
The cuts at IBM began more than a year ago. IMB had already laid off some of its marketing and communications staff in March 2024. AI then allowed the company to replace at least 200 people in human resources, to hire more salespeople and software developers.
In the footsteps of Amazon & Co
Other tech companies have recently announced major staff cuts, relying on artificial intelligence tools, in an effort to improve productivity. Last October it was Amazon’s turn, which announced 14,000 layoffs worldwide. Meta, Facebook’s parent company, also announced 600 layoffs, replacing skills with the use of artificial intelligence.
IBM’s numbers
Two weeks ago, IBM presented very positive quarterly numbers that exceeded expectations. The third quarter ended with net income of $1.74 billion, or $1.84 per share, compared to a loss of $330 million, or 36 cents per share, a year earlier. Adjusted EPS of $2.65 largely exceeded expectations ($2.45). Revenue rose 9% to $16.3 billion above the consensus of $16.09 billion. CEO Arvind Krishna has contributed to IBM’s revenue expansion since replacing Ginni Rometty in 2020 and has developed a cost-cutting plan that does not rule out possible staff cuts.
