IBM announces job cuts in two of its divisions; Tech workforce uneasy about AI’s impact, survey reveals

In the latest workforce reduction move of 2024, IBM has announced significant job cuts within its marketing and communications division. This ‘Resource Action’ — IBM’s preferred term for the layoffs — aligns with its ongoing shift toward artificial intelligence (AI) and other emerging technologies.

Jonathan Adashek, IBM’s Chief Communications Officer, delivered the news to employees in a succinct seven-minute meeting on Tuesday (March 12). Although specific figures were not disclosed, a substantial reduction in staff size appears imminent, CNBC reports.

This announcement follows reports of IBM encouraging voluntary redundancy among its workforce, as part of its goal to achieve $3 billion in annual savings by the end of 2024. The affected employees reportedly belong to the unit responsible for crafting IBM’s brand identity, communication strategies and stakeholder engagement efforts.

This strategic initiative involves replacing nearly 8,000 jobs with AI-driven solutions, highlighting a shift toward automation and operational efficiency. In line with its focus on upskilling in AI, IBM CEO Arvind Krishna reiterated the company's commitment to providing employees with the necessary skills for success in an AI-driven era.

AI adding fuel to the downsizing fire

This latest move, coupled with IBM's decision to lay off approximately 4,000 employees back in January 2024, is indicative of the broader downsizing trend prevalent in the tech industry.

The tech sector has experienced a wave of job cuts in recent months, with approximately 204 tech companies collectively eliminating nearly 50,000 jobs since the beginning of the year. Major players like Alphabet, Amazon and Unity have also announced layoffs during this period.

Factors contributing to this trend include economic adjustments post-pandemic and potential over-hiring during the tech boom. However, now that the economists are optimistic about a soft landing and avoiding a broad recession, continued layoffs throughout the first quarter of 2024 have been raising eyebrows.

The emergence of AI also appears to be playing a significant role. In a recent interview, Nvidia CEO Jensen Huang sounded alarm about job cuts in the IT sector, saying AI tools like ChatGPT could replace coders in the future.

The resultant anxiety has seeped into the workforce as well. In a recent survey conducted in the US, about 72% of workers admitted to feeling uneasy about the impact of AI on their jobs over the next five years.

The impact of these layoffs extends across the industry, leaving many skilled workers in search of new opportunities. While the tech sector remains a significant job generator, the current landscape underscores the importance of adaptability and continuous skill development for tech professionals. Additionally, despite some companies downsizing, others continue to actively recruit in specialised areas such as cybersecurity and artificial intelligence.

(With inputs from TOI)