In 2023, IBM made headlines with the announcement of nearly 8,000 layoffs, primarily from support roles such as Human Resources. The goal? To replace these workers with artificial intelligence (AI), automating repetitive tasks and increasing efficiency. However, just months later, the company found itself doing something it hadn’t anticipated: rehiring many of those workers【¹】.
IBM’s AI Experimentation: The Plan to Cut Costs
IBM’s announcement to reduce its workforce was bold. As a longtime technology pioneer, the company believed that up to 30% of repetitive tasks in HR and other support functions could be automated with AI. The aim was clear: boost productivity and reduce costs. This move came amid a wider trend in the tech industry, with companies like Google and Spotify also trimming staff, often citing AI and automation as key drivers of these cuts【²】.
However, IBM took this plan a step further. The company developed “AskHR,” an AI-driven chatbot designed to handle up to 94% of HR-related tasks. From processing leave requests to managing payroll and employee documentation, AskHR was a game-changer, freeing up employees to focus on more valuable tasks. By automating these processes, IBM saved an impressive $3.5 billion across 70 different roles, demonstrating the efficiency gains AI could provide【³】.
The Unexpected Result: Rehiring and Redirection
But here’s the twist: despite these significant savings, IBM’s workforce actually grew after the layoffs. Arvind Krishna, the CEO, explained to the Wall Street Journal that while AI had helped streamline operations, it also allowed the company to reinvest in other areas. Rather than eliminating jobs permanently, IBM found that the freed-up resources were being directed towards higher-value roles.
IBM began hiring engineers, salespeople, and marketing specialists—positions that require creativity, critical thinking, and human interaction—skills that AI cannot replace. While AI took over routine, repetitive tasks, the demand for human talent in strategic, high-impact areas grew substantially【⁴】.
A New Era of Work: How AI Is Creating Jobs, Not Just Replacing Them
IBM’s experience offers a glimpse into the future of work. Far from being a job-killer, AI is creating new opportunities—though these opportunities require different skills. As automation takes over repetitive tasks, the demand for professionals who can design, manage, and sell AI solutions is surging【⁵】.
This trend is not unique to IBM. Companies like Duolingo and certain customer service platforms have also experimented with replacing workers using AI tools like chatbots. However, in some instances, the results have been less than expected, leading to a return to hiring human specialists who can better manage the limitations of automation【⁶】.
The success of IBM’s AI-driven automation strategy lies in how effectively the company reinvested the savings into areas that required human expertise. For example, AskHR handled over 11.5 million interactions in 2024. Customer satisfaction jumped from a negative Net Promoter Score (NPS) of -35 to a positive +74, showcasing the value of both AI efficiency and human oversight. Yet, only 6% of requests still required human intervention, demonstrating that some tasks will always require a human touch.
What’s Next? The Future of Jobs in the Age of AI
IBM’s story raises important questions about the future of work in an AI-driven world. According to the World Economic Forum, nearly 92 million jobs could be displaced by automation by 2030. However, the same report also highlights the emergence of new roles that require expertise in AI and other high-tech sectors.
The challenge for both companies and workers will be navigating this transformation. Businesses must adapt to the changing demand for skills, while workers will need to invest in continuous learning and reskilling. The key to thriving in this new landscape will be embracing change and preparing for a future where AI doesn’t just replace jobs but reshapes entire industries.
IBM’s journey illustrates that AI is not just about cutting costs—it’s about evolving business models, reallocating human resources, and reinventing the nature of work itself【⁷】.
Footnotes:
“IBM 2023 layoff announcement,” BBC News, 2023. Available at: https://www.bbc.com/news/technology
“How IBM’s AI-driven chatbot transformed HR,” The Guardian, 2024. Available at: https://www.theguardian.com/technology
“The World Economic Forum’s 2023 job displacement report,” World Economic Forum, 2023. Available at: https://www.weforum.org/reports
“Duolingo’s chatbot experiment,” TechCrunch, 2023. Available at: https://techcrunch.com/
“AI’s impact on job creation and automation,” Harvard Business Review, 2023. Available at: https://hbr.org/
“IBM’s automation strategy: A success story,” Wall Street Journal, 2024. Available at: https://www.wsj.com/
“Automation and Human Workforce Synergy,” Financial Times, 2024. Available at: https://www.ft.com/
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