After 7-minute meeting, IBM lays off employees from two divisions

IBM has once again made headlines in the realm of tech layoffs. The firm has revealed plans to reduce its workforce in the marketing and communications divisions, though specific numbers were not disclosed.

The decision was disclosed in a meeting lasting approximately seven minutes, led by IBM’s chief communications officer, Jonathan Adashek, as reported by CNBC, citing insider sources.

This move follows closely on the heels of IBM CEO Arvind Krishna's previous announcement in December, insisting on the importance of employee upskilling in an AI-centric business landscape.

AI dominance

In recent years, IBM has faced growing competition from industry giants like Amazon, Google, and Microsoft in the race towards artificial intelligence (AI) dominance.

In August last year, IBM unveiled intentions to replace nearly 8,000 positions with AI technology, introducing a "development studio" named Watson X aimed at training and deploying machine-learning models.

3,900 employees to be laid off

During an earnings call in January 2023, IBM disclosed plans to cut 3,900 positions, with the CEO hinting at a hiring freeze, suggesting that a significant portion of the workforce could be replaced by AI and automation over the next five years.

IBM's CFO, James Kavanaugh, though indicated that the company would continue hiring for specific roles. The company is anticipating a stable headcount as it navigates through the current phase.

As of the end of 2023, IBM reportedly employed around 288,000 individuals. In January, Kavanaugh revealed that the company is expected to allocate a similar amount for restructuring as it did in the previous year, which amounted to $400 million.

This investment in restructuring coincided with a reduction of approximately 3,900 jobs from IBM's workforce.

Voluntary option

According to reports, IBM has offered its employees the option to voluntarily opt for redundancy as part of its layoff initiative, primarily targeting positions in Europe.

The company's initiative is viewed as more of a transformative effort rather than solely driven by financial considerations.

About 80% of the reduction targets roles within Enterprise Operations & Support (EO&S) and Q2C missions, as well as those in Finance & Operations departments.

The tech industry continues to grapple with the adjustments following the pandemic, during which there was a surge in tech hiring.

However, this potential overhiring led to a challenging 2023, with major companies such as Amazon and Meta letting go of tens of thousands of employees.

Layoffs take centrestage

204 tech companies have collectively shed nearly 50,000 jobs this year, according to data from Layoffs.fyi.

Top industry players such as Alphabet, Amazon, and Unity have all announced workforce reductions, with January recording the highest volume of layoffs.