IBM plans to cut jobs this quarter as part of a restructuring effort to sharpen its focus on high-margin software and AI-driven cloud services.
The company said the layoffs will affect a low single-digit percentage of its global workforce, which stood at about 270,000 at the end of 2024. While some U.S. employees may be impacted, overall employment levels in the country are expected to remain stable year over year.
IBM recently announced revenue of $16.3 billion (up 7 percent) and net income of $2.5 billion (up 17 percent).
Under CEO Arvind Krishna, IBM has been emphasizing its software and cloud business through its Red Hat division to capture growing demand for AI and cloud integration. However, the company recently reported slower growth in its cloud software segment, raising investor concerns. IBM shares, up more than 35 percent this year, fell about 2 percent following the announcement.
In 2025, IBM laid off around 8,000 employees — primarily in its Human Resources division. The cuts were largely driven by automation and AI initiatives: IBM said its “AskHR” agent now handles about 94 percent of routine HR tasks—such as leave requests and payroll processing.
Some reports also indicate IBM is closing or reshaping facilities — for example its Coppell, Texas location — with dozens of layoffs in that case.
Hiring, redeployment and strategic pivot
Simultaneously, IBM has been hiring or redeploying into higher-value roles: software engineering, sales, marketing, and other functions that require creativity and strategic thinking.
According to Arvind Krishna, despite job cuts in some back-office areas, “our total employment has actually gone up … because what AI does is it gives you more investment to put into other areas.”
IBM said artificial intelligence (AI) is driving strong productivity and financial gains across the company. IBM initially targeted USD 2 billion in productivity savings for 2023 but now expects to reach USD 4.5 billion in annual run-rate savings by the end of 2025. IBM’s internal “Client Zero” program, which uses its own AI and automation tools to streamline operations, has led to over 1,000 client engagements.
IBM’s AI business continues to expand, with its Generative AI book of business exceeding USD 9.5 billion since inception. In Consulting, IBM is advancing its “Services as Software” strategy, with more than 200 projects using digital workers at scale.
In Software, IBM is seeing strong demand for watsonx and Red Hat AI, along with growing adoption of its new agentic platform, watsonx Orchestrate. This tool enables enterprises to connect AI agents, models, and workflows with proper governance.
IBM’s hybrid model strategy supports the use of its own Granite models, as well as third-party and open-source models. The newly launched Granite 4.0 models deliver double the inferencing speed while using 70 percent less memory. IBM also deepened partnerships with Anthropic to integrate Claude into its products and with Groq to run watsonx on its high-speed, low-latency AI infrastructure.
Rajani Baburajan
