IBM’s fourth-quarter revenue experienced a modest 4% increase compared to the previous year, surpassing earnings estimates. However, despite this growth, the company has reportedly informed its marketing and communications division employees about an impending workforce reduction.
Jonathan Adashek, IBM’s chief communications officer, reportedly conveyed this decision to employees during a brief seven-minute meeting on Tuesday. The decision comes amidst a broader trend of downsizing within the tech sector, with approximately 204 tech companies collectively slashing nearly 50,000 jobs in the current year.
IBM’s CEO, Arvind Krishna, had previously announced extensive training for all employees in Artificial Intelligence (AI) in December. This initiative followed an August announcement to replace nearly 8,000 jobs with AI. In January, IBM disclosed plans to cut 3,900 positions during its earnings call.
Regarding the recent layoffs, IBM stated that the workforce rebalancing charge disclosed in the fourth-quarter earnings would represent a very low single-digit percentage of its global workforce. The company expects to maintain roughly the same level of employment by the end of 2024 as it had at the beginning of the year.
Despite IBM’s return to growth in recent years, its expansion efforts have been subdued. While fourth-quarter revenue experienced a modest increase, efforts to integrate into the evolving AI landscape have been notable. In May, IBM unveiled WatsonX, a development hub for organizations to train, refine, and implement machine learning models. Revenue generated from generative AI and WatsonX products doubled compared to the third quarter of 2023, as revealed during IBM’s January earnings call.
Overall, IBM’s decision to implement workforce reductions in its marketing and communications division reflects a broader trend within the tech industry. Despite growth in revenue, the company continues to prioritize efficiency and adaptation to the evolving technological landscape, particularly in the realm of AI integration.
