IBM Explores AI, Automation To Replace Thousands Of Jobs: Report
Wade Tyler Millward
IBM CEO Arvind Krishna reportedly plans to suspend or slow hiring for tens of thousands of jobs in the coming years.
IBM CEO Arvind Krishna plans to take the “human” out of some human resources and other back-office jobs that artificial intelligence and automation can do instead of people, according to a Bloomberg report.
Krishna told the news outlet he plans to suspend or slow hiring for about 26,000 non-customer-facing back-office roles, a tenth of the company’s total workforce.
Krishna “could easily see” 30 percent of those roles – 7,800 jobs – replaced by AI and automation over the next five years, he told Bloomberg.
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IBM Embraces AI Replacing Jobs
In a statement to CRN, an IBM spokesperson said that IBM does not have a “blanket hiring ‘pause’ in place.”
Instead, “IBM is being deliberate and thoughtful in our hiring with a focus on revenue-generating roles, and we’re being very selective when filling jobs that don’t directly touch our clients or technology. We are actively hiring for thousands of positions right now,” according to the statement.
Krishna told Bloomberg that despite announcing in January the layoff of about 1.5 percent of its global workforce – which should reach about 5,000 workers once done – the vendor has hired about 7,000 people during the first quarter.
Krishna also told Bloomberg that he believed until late 2022 that the U.S. could avoid a recession. Now, however, he predicts a “shallow and short” recession toward the end of 2023, according to Bloomberg.
This aligns with comments Krishna made during IBM’s latest quarterly earnings report, held in April. Krishna said on the earnings call that in the U.S., IBM “did see some slowing down in consulting projects,” but no project cancellations.
“I want to caution that weaknesses are shrinking,” he added on the call. “Double-digit rates just went down into 6 to 8 percent, which is still healthy.”
He believes the consulting slowdown could spread globally, but it should not spread into the software segment, whose demand remained “very steady.”
“We are not seeing any signs of weakness in software,” he said, noting that IBM sells only business-to-business software, nothing consumer-facing.
Krishna said on the earnings call that, in his view, “a lot of the uncertainty that is in the media” in North America is not present in Japan, India, the Middle East and other parts of Asia.
Europe has “actually been stronger than I would have predicted six months ago,” he said.
“When we look at the mixture of interest rates, inflation, wage inflation, demographic – meaning labor shortages – supply chain resiliency, cyber, technology is actually the only answer companies have against all that. Now that does apply to the larger enterprises, who are our primary customers.”
As for the IBM worker replacements, automation can replace tasks such as providing employment verification letters or moving employees between departments, but it won’t replace more complex tasks such as evaluating workforce composition and productivity – at least for another decade, Krishna told Bloomberg.