In anticipation that some jobs can and will be replaced by artificial intelligence in the near future, IBM's CEO, Arvind Krishna, shared that the company expects to pause hiring, according to Bloomberg reporting. Ultimately, AI and automation has the potential to wipe out approximately 30% of the company’s 26,000 non-customer facing roles over the next five years, he said. To achieve this reduction, the company plans to avoid replacing roles that become vacant through attrition, said an IBM spokesperson.
AI’s disruption of the labor market had been foreseen and speculated about for years and its productive capacity indicates it might be sooner than some anticipated. Krishna's strategy is one of the most significant workforce plans announced in response to this technological change. He predicts that certain tasks like employment verification letters or moving employees between departments will likely be fully automated, but some HR functions, such as evaluating workforce composition and productivity, are less likely to be replaced in the next decade. Meanwhile, qualitative data assessment jobs like the evaluation of workforce composition and productivity, will be harder to automate – at least for now.
IBM currently has a workforce of approximately 260,000 employees, following both strategic jobs cuts and hires throughout the year, a strategy that companies commonly recur to when they want to prop-up quarter profits before an anticipated economic downturn. During Armonk´s earnings announcement, IBM CFO James Kavanaugh stated that new measures to increase productivity and efficiency are projected to generate annual savings of US$2 billion by the end of 2024.
Krishna predicts that there may be a "shallow and short" recession toward the end of 2023, despite previously believing that the US could avoid a recession until late 2022. Nonetheless, Krishna is optimistic that the company's strong software portfolio, which includes the acquired unit Red Hat, will help IBM maintain steady growth despite potential macroeconomic concerns.