IBM’s aggressive push to automate HR functions through artificial intelligence (AI) has taken an unexpected turn. In 2023, the tech giant laid off nearly 8,000 employees, primarily from its HR division, aiming to streamline operations and cut costs using its AI-powered AskHR platform. The goal was clear — automate repetitive tasks, reduce headcount, and boost efficiency.
However, the results did not meet expectations of smooth functioning. While AskHR managed to take care of 94 per cent of standard HR tasks such as payroll queries, leave approvals, and documentation, the remaining six per cent —which required human judgment and empathy—created operational gaps. Naturally, these gaps adversely affected productivity and service quality. This prompted IBM to quietly begin rehiring.
In 2024 despite the earlier cuts, IBM’s overall workforce has grew. The company diverted savings from automation into areas where human skills remain irreplaceable. New roles came up in software development, sales, marketing, and client relations—functions that demand creativity, emotional intelligence and strategic thinking.
AskHR, the AI tool that led to this shift, handled at least 11.5 million employee interactions this year, significantly increasing efficiency. In fact, the firm witnessed noticeable improvement in employee satisfaction, as is clear from its improved internal Net Promoter Score. Yet, IBM paid a price for automating at a very fast pace, without planning for contingencies.
IBM’s experience serves as a lesson for businesses embracing AI. Automation can enhance productivity but cannot fully replace the human element in complex or nuanced scenarios, at least not yet. As more companies explore AI integration, IBM’s journey underlines the importance of balancing technology with the irreplaceable value of human insight.