IBM recently made headlines after using artificial intelligence (AI) to streamline its workforce, resulting in the layoff of roughly 8,000 employees in 2023. The company deployed a company-wide AI program, including a digital assistant named AskHR, which automated 94% of routine HR tasks such as payroll, vacation requests, and document handling.
CEO Arvind Krishna explained that while automation initially reduced staffing, it freed resources for strategic investments. These investments created opportunities in higher-skill areas, prompting IBM to hire additional staff for software development, marketing, and sales. The company aimed to balance automation with human expertise in areas where AI cannot fully replace human judgment.
The AI-driven initiatives generated $3.5 billion in productivity gains across more than 70 business units. Routine tasks were automated, but specialized work in customer engagement, innovation, and problem-solving still required human talent. This shift reflects a growing trend in the technology sector: AI eliminates low-skill roles while increasing demand for advanced skills.
IBM’s approach led to several workforce changes:
- Reduction of routine support staff
- Expansion of technical and creative roles
- Increased compensation for skilled employees
- Hybrid models where humans and AI collaborate
Despite the efficiency gains, AI limitations remain. AskHR processed over 11.5 million queries in 2024, improving the Net Promoter Score from -35 to +74. However, around 6% of queries still required human input, highlighting the need for human oversight in complex situations.
IBM’s experience demonstrates that automation can reduce certain roles while creating new opportunities. Companies must plan for reskilling and restructuring to fully leverage AI. With careful execution, AI can drive productivity and growth rather than solely serving as a tool for cost reduction.
In other related news also read IBM won’t hire people for tasks AI can perform.
The case of IBM underscores the evolving relationship between automation and the workforce, showing that technology and human talent can complement each other in building a more efficient organization.
