IBM’s marketing and communications division is facing significant staff reductions, as confirmed by a source familiar with the matter.
Jonathan Adashek, IBM’s chief communications officer, delivered the news during a brief meeting lasting approximately seven minutes with employees in the division, the source, who requested anonymity, disclosed.
The move follows IBM CEO Arvind Krishna’s earlier statements to CNBC in December, where he highlighted the company’s focus on upskilling employees in AI technologies.
This initiative came after IBM’s announcement in August to replace around 8,000 roles with AI-driven systems. Additionally, IBM had reported in January of the previous year its intention to cut 3,900 positions.
“In 4Q earnings earlier this year, IBM disclosed a workforce rebalancing charge that would represent a very low single-digit percentage of IBM’s global workforce, and we expect to exit 2024 at roughly the same level of employment as we entered with,” IBM informed CNBC in a statement.
These recent layoffs are part of a broader trend of downsizing in the tech industry. According to Layoffs.FYI, approximately 50,000 jobs across 204 tech companies have been cut so far this year.
Notably, January marked a significant spike in layoffs, with companies like Alphabet, Amazon, and Unity announcing workforce reductions.
Despite experiencing some growth in recent years, IBM’s expansion remains restrained. In the fourth quarter, revenue increased by 4% compared to the previous year, exceeding expectations. During the earnings call, CFO James Kavanaugh addressed the ongoing workforce rebalancing.
IBM has been striving to position itself within the evolving AI landscape, which gained momentum with OpenAI’s release of ChatGPT in late 2022.
In May, the company introduced WatsonX, a development studio aimed at enabling companies to “train, tune, and deploy” machine-learning models.
According to IBM’s January earnings call, the book of business for generative AI and Watson products doubled in size from the third quarter of 2023, reaching hundreds of millions.
However, IBM faces fierce competition in the enterprise AI sector. Industry giants like Microsoft, Google, and Amazon offer similar solutions, posing challenges for IBM’s market position. Notably, IBM has been criticized for lagging in monetizing its AI products effectively.
Arvind Krishna acknowledged these challenges, admitting, “The mistake we made was that I think we went after very big, monolithic answers, which the world was not ready to absorb,” during an interview with CNBC in December.
Nearly two years ago, IBM divested its Watson Health unit to private equity firm Francisco Partners for an undisclosed sum.
