IBM Cuts Thousands of Jobs While AI Business Surges to $9.5 Billion
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IBM cuts thousands of jobs as it pushes deeper into AI and cloud computing
Serving tech enthusiasts for over 25 years. TechSpot means tech analysis and advice you can trust. The big picture: The layoff plan underscores how aggressively Big Blue is betting on automation, consulting, and quantum computing to define its next decade. It also marks the latest step in IBM's
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IBM to Cut Thousands of Workers Amid A.I. Boom
The technology supplier said it was shifting its focus to higher-growth businesses, including A.I. consulting and software. IBM said on Tuesday that it planned to cut thousands of workers as it shifts its focus to higher-growth businesses in artificial intelligence consulting and software. The
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IBM Is Laying Off Thousands of Employees as Its AI Business Surges
IBM is making cuts as it focuses on high-growth areas such as AI consulting and software. IBM disclosed on Tuesday that it will eliminate a small percentage of its workforce in the current fourth quarter. The action will affect "a low single-digit percentage" of IBM's global workforce, the company
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IBM to cut thousands of workers amid AI boom - The Economic Times
IBM plans to cut thousands of jobs as it shifts focus to AI consulting and software, affecting a small percentage of its 270,000-strong workforce. US staffing will largely remain unchanged. The move comes amid an AI boom, with many tech firms restructuring to invest in faster-growing, AI-driven
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IBM to Cut Thousands of Jobs as Focus Shifts From Consulting to Software | PYMNTS.com
By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions. The company is doing so as it shifts its focus to higher-growth software and
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IBM cuts thousands of jobs to boost AI and cloud growth
Analysts suggest that IBM needs to balance short-term cost savings with long-term investments in software innovation. Technology company plans to cut thousands of jobs worldwide as part of a restructuring to speed up the shift to artificial intelligence software and services. The layoffs, which
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IBM announces layoffs affecting a low single-digit percentage of its 270,000 global workforce as the company shifts focus to high-growth AI consulting and software services. The cuts come despite strong Q3 results showing AI bookings reaching $9.5 billion.
IBM Announces Strategic Workforce Reduction Amid AI Expansion
IBM has announced plans to cut thousands of jobs in the fourth quarter as part of its ongoing transformation toward artificial intelligence and cloud computing services. The technology giant confirmed that layoffs will affect "a low single-digit percentage" of its global workforce of approximately 270,000 employees
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. While precise numbers remain undisclosed, even a 1% reduction would impact around 2,700 workers.
Source: PYMNTS
The company emphasized that its U.S. workforce is expected to remain stable overall, despite some domestic role eliminations
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. According to reports, IBM began notifying affected employees this week, providing them with 30 days to secure alternative positions within the company before facing termination with severance packages3
.Strong Financial Performance Drives Strategic Shift
The layoffs come despite IBM's robust financial performance in recent quarters. The company reported third-quarter revenue of $16.33 billion, representing a 9% increase from the previous year and exceeding analyst forecasts
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. More significantly, IBM's AI consulting and software bookings surged to $9.5 billion in the third quarter, up from $7.5 billion in the second quarter3
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Source: NYT
CFO Jim Kavanaugh highlighted the accelerating adoption of AI among mainstream corporations, noting that approximately 80% of IBM's AI consulting and software customers over the past six months were new to the company
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. This trend indicates a significant shift from experimental AI pilots to production-ready implementations across enterprise clients.Industry-Wide Transformation and Workforce Rebalancing
IBM's decision reflects broader trends across the technology sector, where companies including Amazon, Meta, and Google have implemented similar workforce reductions while investing heavily in AI infrastructure
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. The company describes these cuts as part of routine "workforce rebalancing" to align employee skills with growth areas such as AI consulting, cloud computing, and quantum research4
.CEO Arvind Krishna has previously demonstrated this internal transformation by replacing several hundred human resources employees with AI agents, subsequently redirecting hiring toward programmers, data scientists, and client-facing sales roles
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. This approach exemplifies IBM's strategy of embedding automation throughout its operations while maintaining overall employment levels through strategic reallocation.Related Stories
Strategic Focus on High-Margin Services
Under Krishna's leadership since 2020, IBM has systematically narrowed its focus toward high-growth, high-margin businesses. The company's most significant restructuring move occurred in 2021 with the spin-off of Kyndryl, its infrastructure and IT services unit that managed legacy computing systems
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. This separation enabled IBM to concentrate resources on scalable cloud platforms, AI consulting, and advanced computing initiatives including quantum computing development.The current workforce adjustments align with IBM's broader strategy to capitalize on the growing enterprise demand for AI-driven solutions. Investment bank Jefferies characterized the AI booking growth as demonstrating "strong momentum in A.I.-driven demand"
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, while analysts note the shift from consulting services toward software solutions that offer higher profit margins5
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