CEO Arvind Krishna reveals plans to pause hiring for roles at risk of AI replacement
- IBM CEO Arvind Krishna expects to pause hiring for roles that could be replaced by AI, affecting approximately 7,800 jobs.
- Back-office functions, such as human resources, are most at risk of AI and automation, with 30% of these roles possibly replaced within five years.
- IBM is focusing on software and services like hybrid cloud, divesting from lower-growth businesses, and seeking $2 billion in savings by 2024.
IBM CEO Arvind Krishna has announced that the company plans to pause hiring for roles that could be replaced by artificial intelligence (AI) in the coming years. In an interview, Krishna stated that hiring for back-office functions, such as human resources, would be suspended or slowed. These non-customer-facing roles account for approximately 26,000 workers, with Krishna estimating that 30% of these jobs could be replaced by AI and automation over a five-year period. This would amount to roughly 7,800 jobs lost, with part of the reduction coming from not replacing roles vacated by attrition.
Krishna’s plan represents one of the largest workforce strategies in response to rapidly advancing AI technology, which has raised concerns about its potential to disrupt the labor market. He envisions that more mundane tasks, such as providing employment verification letters or moving employees between departments, will likely be fully automated. However, certain HR functions, like evaluating workforce composition and productivity, may not be replaced within the next decade.
Despite job cuts announced earlier this year, IBM currently employs around 260,000 workers and continues to hire for software development and customer-facing roles. Under Krishna’s leadership since 2020, IBM has shifted its focus to software and services, such as hybrid cloud, divesting from lower-growth businesses like managed infrastructure unit Kyndryl Inc. and part of the Watson Health business. The company is also considering selling its weather unit.
IBM recently exceeded profit estimates in its latest quarter, driven by expense management and the aforementioned job cuts. The company aims to achieve $2 billion a year in savings by the end of 2024 through new productivity and efficiency measures, according to Chief Financial Officer James Kavanaugh. Although Krishna now sees the potential for a “shallow and short” recession by the end of this year, Bloomberg Intelligence’s Anurag Rana believes IBM’s strong software portfolio, including acquired unit Red Hat, will help maintain steady growth despite worsening macroeconomic concerns.