According to CNBC, IBM is cutting a “low single-digit percentage” of its global workforce in the fourth quarter. The company employed 270,000 people at the end of 2024, meaning even a 1% reduction would eliminate 2,700 jobs. While the company says U.S. employment will remain “flat year over year,” the cuts will still impact some U.S.-based roles. This comes as CEO Arvind Krishna has been actively participating in AI policy discussions, including the recent AI Insight Forum on Capitol Hill. The layoffs follow a broader trend of tech companies seeking productivity gains through increased reliance on artificial intelligence tools.
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The bigger picture here
Look, this isn’t just another round of tech layoffs. There’s something different happening here. IBM has been aggressively pushing its Watsonx AI platform and automation services for years. Now we’re seeing the real-world workforce impact of that strategic shift. And honestly, it’s probably just the beginning.
Here’s the thing: when a company like IBM, which basically invented the modern corporate tech stack, starts cutting jobs while talking about AI productivity, every other enterprise is paying attention. They’re essentially modeling what the future of work looks like in an AI-first world. The question isn’t whether other companies will follow—it’s how quickly.
Who actually gets hit by these cuts?
IBM’s being deliberately vague about which roles are affected, but we can read between the lines. The company specifically mentions that U.S. employment will remain flat, which suggests these cuts are more targeted at global operations and potentially redundant roles. Think about it—they’re not shrinking the company, they’re restructuring it.
My guess? We’re looking at back-office functions, certain legacy technical roles, and positions that can be automated or handled by AI tools. The timing is also interesting—fourth quarter cuts often help companies hit annual financial targets while setting up a “leaner” organization for the new year. It’s brutal, but it’s business.
What this means for IBM’s customers
For enterprises relying on IBM’s services, there might be some short-term disruption. But long-term, this is part of IBM’s transformation into an AI and hybrid cloud company. Arvind Krishna has been clear about this direction for years. The company is betting that AI-driven efficiency will ultimately deliver better services at lower costs.
Still, existing IBM customers should probably check in with their account managers. When a company cuts thousands of jobs, there’s always some operational turbulence. The real test will be whether IBM can maintain service quality while reshaping its workforce. If they pull it off, we’ll likely see this playbook copied across the enterprise tech landscape.
