IBM to pause hiring for jobs that AI could do: CEO
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The plan could mean roughly 7,800 jobs lost in non-customer-facing roles such as human resources.
PHOTO: REUTERS
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New York - IBM chief executive Arvind Krishna said the company expects to pause hiring for roles that it thinks could be replaced with artificial intelligence (AI) in the coming years.
Hiring for back-office functions – such as human resources – will be suspended or slowed, Mr Krishna said in an interview.
These non-customer-facing roles involve roughly 26,000 workers, Mr Krishna added.
“I can easily see 30 per cent of that getting replaced by AI and automation over a five-year period,” he said.
That would mean roughly 7,800 jobs lost.
Part of any reduction would include not replacing roles vacated by attrition, an IBM spokesman said.
AI tools have captured the public imagination with their ability to automate customer service, write text and generate code, and many observers have expressed concern about their potential to disrupt the labour market.
Mr Krishna’s plan marks one of the largest workforce strategies announced in response to the rapidly advancing technology.
More mundane tasks such as providing employment verification letters or moving employees between departments will likely be fully automated, Mr Krishna said.
Some human resource functions, such as evaluating workforce composition and productivity, probably will not be replaced over the next decade, he added.
IBM currently employs about 260,000 workers and continues to hire for software development and customer-facing roles. Finding talent is easier today than a year ago, Mr Krishna said.
The company announced job cuts earlier in 2023,
Still, Mr Krishna said IBM has added to its workforce overall, bringing on about 7,000 people in the first quarter.
Mr Krishna, who has been CEO since 2020, has worked to focus the century-old company on software and services such as hybrid cloud.
He has divested lower-growth businesses like managed infrastructure unit Kyndryl and part of the Watson Health business.
The company is considering selling its weather unit.
IBM topped profit estimates in its most recent quarter due to expense management, including the earlier-announced job cuts.
New productivity and efficiency steps are expected to drive US$2 billion (S$2.67 billion) a year in savings by the end of 2024, it said.
Until late 2022, Mr Krishna said he believed that the United States could avoid a recession.
Now, he sees the potential for a “shallow and short” recession towards the end of 2023.
The company’s strong software portfolio, including acquired unit Red Hat, should help it maintain steady growth despite worsening macroeconomic concerns, wrote Bloomberg Intelligence’s Anurag Rana last week. BLOOMBERG
