IBM CEO Arvind Krishna expects to temporarily halt hiring for positions that may be substituted by AI in the future.
Approximately 26,000 workers in non-customer-facing roles, including human resources, will experience a hiring freeze or reduced hiring, according to Krishna, reports Bloomberg.
“I could easily see 30 per cent of that getting replaced by AI and automation over a five-year period," he said in an interview.
About 7,800 jobs would be lost, with some of the reduction coming from non-replacement of roles left vacant by attrition, IBM confirmed.
Krishna's plan is a workforce strategy in response to the growing concern about the impact of AI tools on labor. The plan is significant as it is one of the largest strategies announced to tackle the possible disruption caused by AI, which includes automation of customer service, text writing, and code generation.
He expects that tasks like employment verification and employee transfers will become fully automated. However, HR functions like workforce evaluation and productivity assessment are unlikely to be replaced within the next ten years.
IBM has a workforce of around 260,000 employees and is seeking to hire more individuals for software development and customer-facing positions.
According to Krishna, finding talent is less challenging now than a year ago. Despite announcing job cuts that may reach approximately 5,000 employees by the end of the year, IBM has hired about 7,000 new people in the first quarter and has increased its overall staff.
Krishna, CEO since 2020, has concentrated the century-old company on software and services such as hybrid cloud, divesting lower-growth divisions like Kyndryl Inc. and part of Watson Health. The weather unit may also be sold.
IBM surpassed profit projections in its latest quarter through effective cost-cutting measures, inclusive of previously mentioned layoffs. CFO James Kavanaugh announced that additional reformation to enhance productivity and efficiency should trigger savings worth $2 billion annually by 2024 during the earnings call.
Krishna had previously thought that the US could dodge a recession until late 2022. However, he now predicts a brief and relatively mild recession at the end of this year.
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