IBM plans to cut thousands of jobs globally as it shifts focus to software and AI

IBM announced Tuesday that it plans to eliminate thousands of jobs during the current quarter as the technology giant continues to restructure its operations toward higher-growth software and services.

A company spokesperson confirmed that the action would impact a "low single-digit percentage" of its global workforce during the fourth quarter of 2025. The company, which employed 270,000 people at the end of 2024, did not specify the exact number of roles being cut, but a 1% reduction would equate to approximately 2,700 jobs.

"We regularly examine our workforce and sometimes rebalance it accordingly," the company stated in a communication cited by news outlets. "In the fourth quarter we are executing an action that will impact a low single-digit percentage of our global workforce."

The layoffs are part of a broader strategic pivot led by CEO Arvind Krishna, who has sought to double down on investments in software, cloud computing, and artificial intelligence integration. This strategy aims to capitalize on increased corporate spending on cloud services, particularly through IBM's Red Hat division.

Under Krishna's leadership, IBM has focused on leveraging AI technology to enhance enterprise services. However, the move comes shortly after the company reported a slowdown in growth within its crucial cloud software segment last month, raising concerns among investors who are heavily betting on Big Blue's ability to successfully execute its transformation.

While the workforce reduction is global, the company anticipates that its overall U.S. employment figures will remain flat year over year, despite some U.S.-based roles being affected by the current action.

IBM's decision to slim down its workforce aligns with a broader trend seen across the technology sector. Numerous tech executives have recently sought ways to improve productivity and efficiency, often by increasing reliance on AI tools to automate tasks and streamline operations. Microsoft CEO Satya Nadella, for instance, has previously noted that while his company plans to hire, it expects to do so with "a lot more leverage" thanks to AI advancements.