The company didn’t immediately respond to a request for comment.
In December, IBM CEO Arvind Krishna told CNBC that the company was “massively upskilling all of our employees on AI,” after it announced a plan in August to replace nearly 8,000 jobs with AI. IBM said on its earnings call in January of last year that it was cutting 3,900 positions.
The latest cuts come alongside another round of downsizing in the tech industry. So far this year, some 204 tech companies have cut almost 50,000 jobs, according to the website Layoffs.fyi. January was the busiest month for layoffs since March, as Alphabet, Amazon and Unity all announced job cuts.
IBM has returned to growth in the past couple years, but expansion remains muted. Revenue in the fourth quarter increased 4% from a year earlier even as earnings topped estimates. CFO James Kavanaugh spoke of workforce rebalancing on the earnings call.
The company has been trying to fit into the emerging AI narrative, which has been the big story across tech since OpenAI released ChatGPT in late 2022. In May, IBM announced WatsonX, billed as a development studio for companies to “train, tune and deploy” machine-learning models.
The book of business for generative AI and Watsonx products doubled in size from the third quarter of 2023, when it was in the low hundreds of millions, according to IBM’s earnings call in January.
IBM faces steep competition in the enterprise AI realm. Microsoft, Google, Amazon and others have similar offerings, and IBM has long been viewed as falling behind in the AI race, particularly when it comes to making money from its products.
“I think that’s a fair criticism, that we were slow to monetize and slow to make really consumable the learnings from Watson winning Jeopardy,” Krishna told CNBC in December. “The mistake we made was that I think we went after very big, monolithic answers, which the world was not ready to absorb.”
Nearly two years ago, IBM sold its Watson Health unit for an undisclosed amount to private equity firm Francisco Partners.
This story is developing. Please check back for updates.
Barbara Terrio is a seasoned business journalist, delving into the world of finance, startups, and entrepreneurship. With a knack for demystifying complex economic trends, she helps readers navigate the business landscape. Outside of her reporting, Barbara is an advocate for financial literacy and enjoys mentoring aspiring entrepreneurs.
