IBM Laid Off 8,000 Workers to Replace Them With AI. It Now Has More Employees Than Ever

IBM was one of the first tech companies to conduct massive layoffs. However, it’s now facing the consequences of the decision it took in 2023: an increased workforce.

Layoffs. In January 2023, IBM joined a wave of layoffs in the technology sector. Google announced it was laying off 12,000 employees, Amazon cut 18,000 jobs, and Microsoft let go of more than 10,000 workers.

IBM saw a complete halt in hiring and laid off 7,800 employees. CEO Arvind Krishna said that the company would replace some positions with AI, claiming that at least 30% of the workforce was replaceable.

Consequences. While IBM highlighted its ability to replace workers with AI, it didn’t address the need for personnel to manage that technology. Krishna told The Wall Street Journal that, despite layoffs, the total number of employees has actually increased.

He added:

“While we have done a huge amount of work inside IBM on leveraging AI and automation on certain enterprise workflows, our total employment has actually gone up, because what it does is it gives you more investment to put into other areas.”

Although the company laid off workers to replace them with AI, it simultaneously increased hiring for programming and sales positions. HIBM hasn’t confirmed how many employees it’s hired or whether they’ve effectively replaced the 7,800 employees who were laid off.

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Automation at the forefront. IBM has been using AskHR, an AI solution, for over three years. Developed in 2021, AskHR is employed for certain processes related to human resource management, including payroll, employee documentation, and vacation leave management.

The company claims to have automated 94% of routine HR tasks, resulting in productivity improvements valued at $3.5 billion across more than 70 business areas over the past few years. These significant savings in human resources have allowed IBM to reinvest in other sectors.

An AI-first company. On its official website, IBM outlines its commitment to AI, which reflects the current state of AI in the workplace. It’s like something straight out of Black Mirror.

“As the chatbot learned and got smarter, our [Net Promoter Score] began to rise. We added more functionality, along with the ability to do transactions. AskHR morphed into a digital assistant that allowed managers to transfer employees to another manager or help them initiate the quarterly promotions process. And it was all done right in AskHR with just a few clicks.

In 2024, AskHR handled more than 11.5 million interactions; 94% of those were contained within the platform. That means out of all the questions that were asked, only 6% needed to be routed outside of AskHR to a specialized HR Partner for assistance. The current NPS is +74, so we have come a long way from that –35 score. There are almost 90 automations embedded into AskHR, and more are on the way. Because of this, managers can do HR transactions 75% faster than before.”

According to IBM, automating processes with AI has made the company faster and more efficient, requiring minimal referral to HR staff. A key factor in this success is AskHR’s evolution. Trials began in 2017, and by 2025, it’s set to fully replace certain human roles.

IBM isn’t alone. The trend of companies replacing workers with AI isn’t a new phenomenon. Some entities have already replaced up to 90% of their customer service departments with chatbots, claiming that this was the right decision. Duolingo is one of the companies that has started to replace human team members.

The impact of AI on employment is particularly linked to process automation. A report by the World Economic Forum projects that process automation could eliminate around 92 million jobs by 2030.

Image | Carson Masterson

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