In a twist of technological irony, IBM’s drive to streamline operations through artificial intelligence (AI) led to the elimination of roughly 8,000 jobs in 2023. However, instead of shrinking its workforce permanently, the tech giant soon found itself hiring even more employees — this time for roles that emerged as a direct result of the same AI systems that replaced routine human tasks.
According to IBM CEO Arvind Krishna, automation initially helped reduce staffing in administrative and repetitive areas, particularly within human resources. Yet, it also freed up financial and operational capacity for strategic investments, fueling the company’s expansion into higher-skill, innovation-driven sectors.
AI Transforms Routine Work
IBM’s company-wide adoption of AI was designed to simplify internal processes and cut costs. A major component of this effort was AskHR, a digital assistant capable of automating 94% of standard HR tasks, including payroll queries, vacation approvals, and document management.
This bold step produced an estimated $3.5 billion in productivity gains across more than 70 business units. But it also triggered a paradox — while automation reduced some roles, it simultaneously created new positions in areas such as:
- Software engineering and AI development
- Data analytics and sales strategy
- Customer success and creative marketing
“These tools don’t replace people — they change what people do,” Krishna explained. “Our goal is to make human work more strategic, not obsolete.”
The Reinvestment Effect
Funds saved from the layoffs were redirected toward innovation, expanding teams focused on cloud computing, AI infrastructure, and business consulting.
IBM’s shift reflects a broader global trend: AI eliminates repetitive jobs but also increases demand for technical and creative expertise.
The company’s evolving structure now includes:
- Smaller administrative departments
- Rapidly growing technical divisions
- Hybrid AI-human workflows, blending automation with human judgment
- Higher pay scales for advanced skill sets
The Limits of Automation
Despite its success, AI at IBM isn’t flawless. AskHR processed over 11.5 million employee requests in 2024, but about 6% still required human assistance, underscoring AI’s inability to handle nuanced or sensitive cases.
Notably, IBM’s internal satisfaction score — known as the Net Promoter Score (NPS) — improved dramatically, rising from -35 to +74, suggesting employees were more satisfied with faster, AI-powered responses.
Still, Krishna emphasized that AI must complement, not replace, human intuition, especially in areas demanding empathy, creativity, or complex decision-making.
Lessons for the Future
IBM’s experiment has become a case study in responsible AI transformation. It shows that when managed thoughtfully, automation doesn’t just replace jobs — it redefines the workforce.
The World Economic Forum projects that while 92 million jobs could be displaced by 2030 due to AI, the same technological shift could create millions of new ones in fields like robotics, AI ethics, cybersecurity, and digital design.
For IBM, the future lies in balance — leveraging AI to enhance productivity, while continually reskilling and redeploying human talent.
As Krishna puts it:
“The companies that will thrive are not the ones that replace people with AI, but the ones that teach people to work with AI.”
In other news also read about Nestlé to Cut 16,000 Jobs in Global Restructuring Push
