IBM today announced job cuts in its marketing and communications departments. The news was communicated to the staff by the company’s chief communication officer, Jonathan Adashek, in a brief meeting. IBM’s decision comes amidst the trend of job cuts in the IT indutry, with around 50,000 jobs lost in 204 technology companies since the beginning of the year.
The job cuts are part of IBM’s larger strategy of staff optimization and the integration of Artificial Intelligence (AI) into their business operations. Last year, the company announced plans to replace approximately 8,000 jobs with AI. Moreover, IBM’s CEO, Arvind Krishna, stated in an interview with CNBC in December that a widespread up-skilling in AI for all employees would occur.
Last year, IBM disclosed plans to lay off 3,900 employees. The company emphasized that this would represent just a small fraction of its total workforce. IBM’s Q4 2023 report indicated that the cuts were part of a staff rebalancing effort, aiming to maintain a similar workforce size at the end of 2024 as it had at the start of the previous year.
The AI sector has become crucial for IBM, especially following the launch of OpenAI’s AI chatbot, ChatGPT, which attracted public attention to generative AI capabilities. In May, IBM revealed WatsonX, a platform for the development, training, tuning, and deployment of machine learning models, part of the company’s strategy to lead in enterprise AI. The company has seen its revenue from products related to generative AI and WatsonX double from Q3 2023, reaching hundreds of millions of dollars.
Despite these achievements, IBM does face heavy competition from companies like Microsoft, Google, and Amazon, who are also advancing their own AI services. The company has been criticized for its slow pace in monetizing and integrating AI into its products. Acknowledging this, Krishna admitted that focusing on the development of large-scale and complex solutions, which the market was not ready to accept, was a mistake. Marking a significant shift in IBM’s approach to healthcare and AI, the company sold its Watson Health unit to investment firm Francisco Partners.
