In a brief seven-minute session, Jonathan Adashek, Chief Communications Officer at IBM, disclosed job cuts within the company’s marketing and communications units. Adashek communicated IBM‘s implementation of cost-saving measures in these areas, resulting in a workforce reduction. Although the exact count of affected employees is undisclosed, sources familiar with the matter, as reported by CNBC, confirmed this development.
The move comes as a surprise as CEO Arvind Krishna had been focusing on training employees to adapt to an AI-powered business environment.In December 2023, Krishna had mentioned that up to 30% of specific roles, particularly in back-office functions, could be replaced by AI and automation within the next five years.
“I think that’s a fair criticism, that we were slow to monetize and slow to make really consumable the learnings from Watson winning Jeopardy,” Krishna told CNBC in an interaction.
This is not the first time IBM has laid off employees. During its earnings call in January 2023, the company announced that it would be eliminating 3,900 positions. At the time CFO, James Kavanaugh, mentioned that IBM expects to maintain its employment levels similar to the beginning of the year by the end of 2024.
The tech industry has seen many layoffs in 2024, with approximately 50,000 jobs being cut across 204 companies, according to Layoffs.fyi. IBM’s decision to reduce its workforce in the marketing and communications departments is part of a larger trend as companies navigate the rapid advancements in AI and optimise their operations.
Despite the layoffs, IBM has reported modest growth, with fourth-quarter revenue increasing by 4% compared to the previous year, exceeding earnings estimates. However, the company faces fierce competition from rivals such as Amazon, Google, and Microsoft, who are investing heavily in AI development.
The move comes as a surprise as CEO Arvind Krishna had been focusing on training employees to adapt to an AI-powered business environment.In December 2023, Krishna had mentioned that up to 30% of specific roles, particularly in back-office functions, could be replaced by AI and automation within the next five years.
“I think that’s a fair criticism, that we were slow to monetize and slow to make really consumable the learnings from Watson winning Jeopardy,” Krishna told CNBC in an interaction.
This is not the first time IBM has laid off employees. During its earnings call in January 2023, the company announced that it would be eliminating 3,900 positions. At the time CFO, James Kavanaugh, mentioned that IBM expects to maintain its employment levels similar to the beginning of the year by the end of 2024.
The tech industry has seen many layoffs in 2024, with approximately 50,000 jobs being cut across 204 companies, according to Layoffs.fyi. IBM’s decision to reduce its workforce in the marketing and communications departments is part of a larger trend as companies navigate the rapid advancements in AI and optimise their operations.
Despite the layoffs, IBM has reported modest growth, with fourth-quarter revenue increasing by 4% compared to the previous year, exceeding earnings estimates. However, the company faces fierce competition from rivals such as Amazon, Google, and Microsoft, who are investing heavily in AI development.
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