IBM Puts a Halt on Hiring Amid Plans to Replace 7,800 Jobs with AI
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IBM plans to pause hiring for roles that can be automated by artificial intelligence.
CEO Arvind Krishna told Bloomberg that roughly 30% of back office roles could be replaced by AI over a five-year period.
However, some HR functions such as evaluating workforce composition and productivity won’t be replaced by AI over the next decade.
American multinational technology corporation IBM plans to pause hiring for jobs that can be automated by AI, per a Bloomberg report.
IBM CEO Arvind Krishna told Bloomberg in an interview that hiring in back-office functions such as human resources will be suspended or slowed. He revealed that these roles amount to roughly 26,000 employees and that 30% of them could get automated by AI over a five-year period, which means this move could cost about 7,800 employees their jobs.
An IBM spokesperson said that any job cuts would include not filling positions that become vacant due to attrition. The tech industry has been seeing waves of layoffs even before ChatGPT fueled the AI boom last November. As many fear for their job security, it is becoming clear that artificial intelligence technology has led to layoffs in the labor market worldwide.
Earlier this year, IBM cut about 3,900 staff, and the amount may increase to 5,000 once the layoff is completed. The company is still hiring in high-growth areas and has added about 7,000 employees to its workforce in Q1 this year.
According to Bloomberg, mundane tasks like issuing employment verification letters or transferring employees between departments will likely be fully automated. However, some HR functions that require human input, such as evaluating workforce composition and productivity, are unlikely to be replaced over the next decade.
IBM has been focusing on its open hybrid cloud platform and enterprise-focused AI offerings since Krishna took on the CEO role in 2020. In IBM’s earnings call on Apr 19, James Kavanaugh, IBM senior vice president and CFO, said: “In the quarter, we remained focused on the fundamentals of our business, increasing productivity and generating operating leverage.” Kavanaugh added that new productivity and efficiency steps are expected to save the company $2 billion by 2024.
- Recent months have seen a wave of layoffs across the labor market as companies start employing more automation technologies, such as chatbots and natural language processing software. As brands aim to reduce costs and maximize profits, more people are losing their jobs. The impact of AI on layoffs can be seen in the increasing unemployment rates in the United States and the United Kingdom.
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