IBM Puts Brakes on Hiring, Replace Roles with Artificial Intelligence

IBM anticipates halting recruitment for job positions that are likely to be substituted by artificial intelligence in the upcoming years stated by Arvind Krishna, the CEO of International Business Machines Corp.,

IBM CEO, Arvind Krishna, stated that the company plans to suspend or slow down the hiring process for back-office functions, which includes HR. These roles comprise about 26,000 workers, and IBM expects around 30% of those jobs to be replaced by AI and automation over the next five years, resulting in an estimated loss of approximately 7,800 jobs. The company spokesperson also noted that attrition would contribute to the reduction in jobs.

Also Read: India’s Manufacturing PMI Climbs to 4 Month High on Strong Output and New Orders

The growing use of artificial intelligence (AI) in automating tasks such as customer service, writing and coding has raised concerns about its impact on jobs. In response to this, IBM CEO, Arvind Krishna, has announced one of the largest workforce strategies to date, in which the company plans to automate HR tasks, such as employment verification letters and employee movement between departments. Additionally, he believes that some HR functions, such as evaluating workforce composition and productivity, will likely not be replaced by AI over the next decade.

As of now, IBM has a workforce of around 260,000 employees and is actively recruiting individuals for customer-facing and software development positions, according to Krishna. He also mentioned that the process of finding talent is now comparatively more straightforward than it was a year ago. IBM previously announced its plan to cut jobs, which could affect nearly 5,000 employees once completed. Nevertheless, Krishna stated that the company has on-boarded around 7,000 people in the first quarter and has increased its workforce overall.

IBM’s CEO, Arvind Krishna, has been working to shift the company’s focus towards software and services like hybrid cloud, while divesting lower-growth businesses, such as Kyndryl Inc. and a part of the Watson Health business. The company is also considering the sale of its weather unit. In the recent quarter, IBM exceeded profit estimates due to expense management, including the previously announced job cuts. CFO James Kavanaugh has stated that new productivity and efficiency measures will drive $2 billion in savings annually by the end of 2024

Also Read: Rising Electricity Import and Transportation Expenses to Increase Bills

Krishna previously predicted that the United States could avoid a recession until late 2022. However, he now believes that there is a possibility of a brief and mild recession towards the end of 2023. Despite the increasing macroeconomic concerns, IBM’s robust software portfolio, which includes the acquired unit Red Hat, is expected to aid in maintaining steady growth, according to a recent article by Bloomberg Intelligence’s Anurag Rana.