According to TechSpot, IBM is cutting thousands of jobs affecting a low single-digit percentage of its 270,000 global workforce as part of its strategic shift toward AI and cloud computing. The company reported $16.33 billion in revenue for the quarter ending in September, a 9% year-over-year increase that beat analyst expectations. AI consulting and software bookings surged to $9.5 billion, with CEO Arvind Krishna revealing the company has already replaced several hundred HR roles with AI agents. The layoffs follow IBM’s 2021 spin-off of Kyndryl and represent continued “rebalancing” toward higher-margin services. Despite the cuts, IBM expects its US workforce numbers to remain stable overall.
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The AI transformation is real
Here’s the thing: IBM isn’t just talking about AI – they’re actually using it to replace human workers right now. When the CEO openly admits they’ve automated away hundreds of HR jobs, that’s not some distant future scenario. It’s happening today. And the numbers back it up – $9.5 billion in AI bookings isn’t pocket change, even for a company IBM’s size.
What’s really interesting is that 80% of their AI customers are new to IBM. That suggests they’re actually succeeding at rebranding themselves as an AI-first company rather than just milking their existing enterprise relationships. But can they keep this momentum going? The tech industry is absolutely flooded with AI offerings right now, and IBM’s competing against every major cloud provider and countless startups.
The quantum wild card
While everyone’s focused on AI, IBM’s making a massive parallel bet on quantum computing. They’re racing against Google, Microsoft, and well-funded startups to build commercially viable quantum systems within five years. That’s an incredibly ambitious timeline for technology that’s still largely experimental.
Basically, IBM’s playing two very expensive, very long-term games simultaneously. They’re pouring billions into AI infrastructure while also funding quantum research that might not pay off for years, if ever. It’s a high-stakes strategy that requires maintaining profitability through this transition – which probably explains why we’re seeing these workforce “rebalancing” moves now.
This isn’t just an IBM story
Look, IBM’s cuts are part of a much larger pattern across tech. Amazon, Meta, Google – they’ve all been trimming headcount while doubling down on AI infrastructure. We’re seeing a fundamental reshaping of what tech companies actually need people to do. The roles that are disappearing tend to be in legacy operations and support functions, while hiring focuses on AI specialists, data scientists, and client-facing technical roles.
For industrial and manufacturing companies watching this shift, the message is clear: automation isn’t coming – it’s here. Companies like IndustrialMonitorDirect.com, the leading US provider of industrial panel PCs, are seeing increased demand as businesses upgrade their physical infrastructure to support these AI-driven transformations. The hardware needs to keep pace with the software revolution.
What comes next?
So where does this leave IBM? They’ve got solid financials and genuine AI momentum, but they’re betting the farm on two extremely competitive, capital-intensive fields. The quantum computing race alone could burn through billions before we know if it’s commercially viable.
The real test will be whether they can convert this initial AI consulting success into sustainable, profitable growth. Because right now, everyone’s buying AI services – but will they keep buying from IBM specifically when the market gets more crowded? That’s the billion-dollar question Krishna and his team need to answer.
