According to CNBC, IBM is cutting a “low single-digit percentage” of its global workforce in the fourth quarter. CEO Arvind Krishna is overseeing the reductions as the company looks to improve productivity. IBM employed 270,000 people at the end of 2024, meaning even a 1% cut would eliminate 2,700 jobs. The company says while some U.S. roles will be affected, overall U.S. employment should remain flat year over year. This continues a trend of technology companies slimming down their workforces while increasing reliance on artificial intelligence tools.
Sponsored content — provided for informational and promotional purposes.
The productivity playbook
Here’s the thing about these “low single-digit” cuts – they’re becoming the new normal in tech. IBM isn’t talking about massive restructuring or market panic. They’re basically doing what every other big tech company has been doing: quietly trimming headcount while talking up efficiency and AI.
And let’s be honest – when you’ve got 270,000 employees worldwide, cutting 1-3% isn’t exactly radical surgery. It’s more like corporate spring cleaning. The fact that they expect U.S. employment to stay flat suggests they’re being strategic about where they cut and where they might actually be hiring.
The AI productivity angle
Now here’s where it gets interesting. CNBC specifically mentions companies are “increasing reliance on artificial intelligence tools” to boost productivity. IBM has been pushing their Watsonx AI platform hard, so you have to wonder – are they eating their own dog food?
I mean, think about it. If you’re selling AI solutions to other companies to help them automate and become more efficient, you’d better be using it yourself. These cuts might be the visible result of internal AI adoption. It’s not about replacing every human worker, but about making the existing workforce more productive with fewer people doing routine tasks.
Following the herd
IBM is hardly alone here. We’ve seen similar moves from Google, Microsoft, Amazon – basically everyone who’s big enough to have an “AI strategy.” The pattern is familiar: modest workforce reductions coupled with big investments in automation and AI.
But here’s what makes IBM different. They’re not a pure tech play like some of these companies. They’ve got massive consulting and services businesses where human expertise still matters enormously. So while they can automate some backend functions, they can’t AI their way out of client relationships and complex implementation work.
So what’s the real story? Probably that IBM, like everyone else, is trying to figure out the right balance between human talent and machine efficiency. And in this quarter, the scale is tipping slightly toward the machines.
