When we thought that the season of layoffs was finally over, American technology giant IBM is quietly laying off thousands of employees.
IBM Layoffs Thousands If Employees Quietly
This latest move by IBM is mainly impacting the roles including senior-level programmers, sales and support staff.
It appears that these recent cuts by IBM were carried out in secret as shared by the employees.
They said that they were asked to sign an NDA (Non-Disclosure Agreement), and not talk about the specifics, as per the media report.
It appears that the IT service provider took a $400 million “workforce rebalancing” charge to cover the cost of planned layoffs in the first quarter of 2024 reportedly.
Further, this charge follows a similar spending of $300 million in 2023 during the same period IBM announced its plans to cut 3,900 jobs in 2023.
The cost of workforce rebalancing represents a very low single digit percentage of the company’s workforce, said IBM’s spokesperson.
Sharing that it expects to exit 2024 with roughly the same number of employees as the beginning of the year.
Interestingly, the IT firm did not share the exact number of employees affected by these layoffs.
By the end of 2023, IBM had about 288,000 employees worldwide with the fixed cost per employee,
After the last year’s charge and job cuts disclosure, IBM could be letting go of close to 5,200 employees, the report suggested.
Why Would This Happen?
This is mainly affected by Artificial Intelligence (AI) as it has completely changed the skills and qualities needed to pursue a career in the tech world, said the two top IBM executives in a media interview.
“When I was educated, I learnt five programming languages. If I’m a student today, there’s no real need to go as deep in learning and understanding these languages anymore. AI will actually help you do it,” said Hans A.T. Dekkers, General Manager of IBM Asia Pacific.
Up to 30% of the tech giant’s back-office jobs, which adds up to 7,800 roles, could get replaced by AI and that IBM (referred to as Big Blue) would slow hiring roles over the coming five years from then, said IBM’s CEO Arvind Krishna told in a May 2023 in a media interview.
Just before this IBM announced a plan earlier that year to cut 3,900 jobs, afterwards, IBM’s first-quarter 2024 earnings report showed it kept $400 million for “workforce rebalancing.”
This situation is not specific to IBM only as Cisco cut 7% of its workforce while at the same time, investing $1 billion into AI startups.
Similarly, Meta also followed suit to focus on AI, just like Amazon and Intuit.
Dell also went ahead with around 12,500 sales-related roles cutting and integrated AI to replace those jobs.
