IBM Slashes Thousands of Jobs Despite Profit Surge

• IBM has confirmed it will lay off a "low single-digit percentage" of its global workforce in the fourth quarter, potentially impacting nearly 3,000 employees.
• The job cuts are proceeding despite the company reporting stronger-than-expected earnings, driven by a 10% increase in software revenue.
• This move places IBM alongside other tech giants like Amazon and Meta, who have also recently announced significant workforce reductions amid a pivot to AI.
• While global jobs are being cut, IBM anticipates that its overall U.S. employment numbers will remain flat year-over-year.

Big Blue Trims Down Amidst Industry-Wide Shake-Up

In a move that has sent ripples through the tech community, IBM announced on Tuesday that it will be cutting thousands of jobs in the final quarter of the year. A company spokesperson confirmed that a "low single-digit percentage" of its global workforce will be affected, a figure that could translate to the loss of approximately 2,700 jobs based on its 270,000-strong employee count at the end of 2024.

The decision is particularly jarring as it comes on the heels of a strong financial report on October 22, where IBM surpassed earnings expectations with a notable 10% jump in software revenue. This paradox highlights a growing and unsettling trend across the technology sector: profitability no longer guarantees job security.

Following the Herd: A Pattern of Tech Layoffs

IBM is not acting in a vacuum. The company joins a growing list of tech behemoths slimming down their operations. Recently, Amazon announced plans to cut 14,000 corporate roles, while Facebook's parent company, Meta, revealed layoffs of 600 workers within its AI division. Executives across the industry are increasingly looking to streamline operations and boost productivity, often by leveraging artificial intelligence tools to replace human roles.

This follows earlier restructuring at IBM in March 2024, which impacted employees in the marketing and communications departments. CEO Arvind Krishna has been vocal about the role of AI in the company's future, stating in May that AI agents had already taken over the work of about 200 people in human resources, allowing the company to hire more salespeople and developers.

The Official Word and The Road Ahead

Despite the global cuts, IBM has attempted to soften the blow for its domestic workforce. An IBM spokesperson told CNBC, “While this may impact some U.S.-based roles, we anticipate that our U.S. employment will remain flat year over year.”

Under the leadership of Arvind Krishna, who took the helm in 2020, IBM has successfully expanded its revenue base. However, this latest announcement confirms that even successful legacy companies are aggressively repositioning themselves for a future defined by AI and operational efficiency, a shift that is reshaping the employment landscape for thousands of tech workers.