IBM announced on Tuesday it will cut thousands of jobs in the fourth quarter as the company shifts resources toward AI consulting and cloud computing.
The layoffs will affect a "low single-digit percentage" of IBM's roughly 270,000-employee global workforce. That translates to somewhere between 2,700 and 5,000+ workers losing their jobs - though some reports suggest the number could reach 8,000.
IBM CEO Arvind Krishna isn't being shy about the reason: AI agents are already replacing human workers, and the company is restructuring to accelerate that transition.
AI Already Replaced "Several Hundred" HR Workers
In a recent statement, Krishna revealed that IBM has already replaced work previously performed by "several hundred human resources employees" with AI agents.
Not "augmented." Not "assisted." Replaced.
Those displaced HR workers didn't disappear entirely - IBM claims it redeployed them to other roles like programming, data science, and client-facing sales positions. But that's the key pattern emerging across tech: AI eliminates jobs in one department, and companies shuffle displaced workers into roles that haven't been automated yet.
The obvious question: What happens when AI comes for those roles too?
The "Rebalancing" That Always Means Layoffs
IBM is calling these cuts part of an ongoing "rebalancing" to align employee skills with growth areas like AI consulting, cloud computing, and quantum research.
"Rebalancing" has become corporate America's favorite euphemism for layoffs. It sounds strategic and thoughtful rather than what it actually is: cutting people whose jobs are being automated.
The company says some U.S.-based roles will be impacted, but it expects to keep overall U.S. headcount "flat year over year." Translation: They're cutting thousands of jobs while simultaneously hiring for AI-focused positions. Net result: same headcount, but vastly different skill requirements.
If your skills aren't AI-adjacent, you're vulnerable.
IBM's AI Business Is Booming (As Employees Get Cut)
While announcing layoffs, Krishna emphasized that IBM's "AI book of business now stands at more than $9.5 billion."
Let that sink in. IBM is generating nearly $10 billion in AI revenue while simultaneously cutting thousands of jobs because AI is making human workers redundant in back-office operations.
The company isn't struggling. It's thriving. The layoffs aren't about survival - they're about maximizing profit by replacing expensive humans with cheaper AI systems.
IBM's AI-driven services are in high demand. Clients are paying billions for IBM to help them deploy AI. And part of what makes that AI valuable to those clients is its ability to reduce their own headcount.
IBM is selling automation that eliminates jobs at client companies while simultaneously using that same automation to eliminate jobs internally. It's a perfect closed loop of workforce displacement.
Which Jobs Are Getting Cut?
IBM hasn't provided specific details on which departments or roles are being targeted, but the pattern is clear: back-office operations and administrative functions are primary targets.
The company already demonstrated this with HR, where AI agents took over work previously done by hundreds of employees. Likely targets for the current round of cuts include:
- Additional HR and administrative staff
- Finance and accounting roles (data entry, reconciliation, reporting)
- IT support and helpdesk positions
- Operations coordinators and process managers
- Junior analysts and researchers
These are exactly the types of structured, process-driven roles that AI excels at automating. They involve repetitive tasks, clear decision trees, and work that can be codified into algorithms.
The Middle Management Squeeze: IBM is also restructuring to create organizations with "fewer layers" and "more ownership." That's code for flattening hierarchies by eliminating middle management positions. When AI can coordinate workflows, track progress, and generate reports automatically, middle managers become redundant.
The Gen Z Hiring Promise That Didn't Age Well
This announcement comes with an extra layer of irony. IBM's CEO recently acknowledged that "Gen Z's hiring nightmare is real" and pledged to increase hiring of recent college graduates.
Then, weeks later, IBM announced it's cutting thousands of jobs.
The contradiction is stark. Krishna expressed concern about young workers struggling to find employment while simultaneously deploying AI that eliminates entry-level and junior positions - exactly the roles that Gen Z workers need to start their careers.
It's a perfect example of how corporate leaders can simultaneously recognize the societal problem while actively making it worse for their own bottom line.
This Is Just The Beginning
IBM isn't unique. It's part of a broader wave of AI-driven layoffs hitting the tech sector in 2025. Over 180,000 tech workers have been laid off this year according to industry trackers, with AI cited as a contributing factor in many cases.
But IBM is notable for its CEO's unusual transparency about what's happening. Krishna isn't hiding behind vague language about "market conditions" or "strategic realignment." He's explicitly stating that AI agents are replacing human workers, and the company is restructuring accordingly.
This is what the next decade of work looks like:
- Companies deploy AI systems for back-office operations
- AI proves it can do the work faster, cheaper, and 24/7
- Companies "rebalance" by cutting the humans those AI systems replaced
- Remaining workers get redeployed to not-yet-automated roles
- Repeat until there are no not-yet-automated roles left
The Bottom Line
IBM is cutting thousands of jobs because AI agents are already doing work that used to require human employees. The company's AI business is generating nearly $10 billion in revenue. The CEO is openly stating that AI has replaced hundreds of HR workers and that the company is pivoting toward AI-focused services.
These aren't pandemic corrections or market adjustments. This is structural workforce displacement driven by automation capabilities.
IBM promised to hire more Gen Z graduates while simultaneously deploying AI that eliminates the entry-level roles those graduates need. The company is generating record AI revenue while cutting staff. It's restructuring with "fewer layers" because AI makes middle management obsolete.
And every other company is watching and learning.
If IBM can maintain operations while cutting thousands of employees and replacing them with AI agents, why wouldn't every other corporation follow the same playbook?
They will. They are. This is just one of hundreds of similar announcements that will define the next few years of the workforce transformation.
Original Source:
CIO Dive: IBM to lay off thousands as attention shifts to software