IBM fired 8,000 workers because of AI, but hired more year later

In 2023, IBM, one of the oldest tech companies in the world, announced the layoff of almost 8,000 employees. The decision was related to plans to automate a number of internal processes using artificial intelligence. However, a year later, the strategy led to an unexpected result: the company’s headcount grew again and exceeded the figures before the layoffs.

The layoffs primarily affected support services, where it was planned to automate up to 30% of repetitive tasks, as well as HR departments, for which the automation level was to reach 94%. In the latter case, IBM implemented the AskHR AI platform, which took over tasks related to vacations, payroll, and document management.

By the end of 2024, AskHR processed 11.5 million requests, and the user satisfaction index (NPS) increased from -35 to +74. According to IBM estimates, the AI ​​system has reduced costs by about $3.5 billion in more than 70 business areas.

Another unexpected effect was that the freeing up of resources allowed the company to reallocate them to new projects and areas, which resulted in the active hiring of specialists. As IBM CEO Arvind Krishna noted in an interview with the Wall Street Journal, automation opened up opportunities for investment in other areas, which led to staff growth.

According to Krishna, the greatest expansion affected positions that require critical thinking and interpersonal interaction – these are software engineers, sales specialists, and marketers. Thus, despite the reduction of routine positions, the company began to form new roles for which AI is not yet able to serve as a full-fledged replacement.

A similar approach is observed in other technology corporations. Microsoft has previously cut about 6,000 jobs, mostly in development, even as the company has been ramping up its use of AI in coding. CEO Satya Nadella has said that more than 25% of Microsoft’s code is already written with AI, and has expressed a desire to increase that share to 50%.

The World Economic Forum estimates that automation could eliminate about 92 million jobs by 2030. However, new jobs are also expected to emerge, the scale and exact number of which are not yet predicted.