IBM to cut thousands of jobs as it refocuses on software and AI cloud services

IBM confirmed on 4 November, 2025, that it will cut a low single-digit percentage of its global workforce in the fourth quarter, potentially affecting thousands of employees.

The decision comes as part of a strategic shift to prioritise high-margin software and cloud offerings linked to artificial intelligence.

In a statement, IBM said, “We routinely review our workforce… and at times rebalance accordingly. In the fourth quarter, we are executing an action that will impact a low single-digit percentage of our global workforce.”

With a workforce of approximately 270,000 employees as of the end of 2024, the planned reduction could affect several thousand roles globally. Despite some impact on U.S.-based staff, IBM stated that it expects employment in the United States to remain flat year over year.

A company spokesperson emphasised that the move is tied to its ongoing workforce strategy.

“IBM’s workforce strategy is driven by having the right people with the right skills to do the work our clients need,” the spokesperson told CRN.

“While this may impact some U.S.-based roles, we anticipate that our U.S. employment will remain flat year over year.”

The Armonk, New York-headquartered company, a major supplier of enterprise technology, is among several tech giants streamlining operations as they seek to invest more heavily in AI. Other firms making similar workforce reductions include Amazon, Meta, Google, and Microsoft.

Amazon recently announced it would lay off 14,000 employees, while Meta disclosed plans to cut about 600 roles from its AI division.

The rationale behind such moves is to reallocate resources toward AI and cloud services, viewed as long-term growth drivers by investors and executives.

Under Chief Executive Arvind Krishna, IBM has intensified its focus on software, especially through its Red Hat division. Red Hat provides hybrid cloud infrastructure, enabling businesses to integrate AI technologies into their operations more efficiently.

However, IBM reported a slowdown in growth in its cloud software segment in October 2025, raising concerns among investors.

Despite that, IBM shares had risen by over 35 per cent in 2025 before dropping nearly 2 per cent on the day the cuts were announced.

The shift towards AI and software is seen as essential for IBM to remain competitive, especially as clients demand scalable, intelligent cloud solutions.

Executives across the industry have said AI could yield major efficiency gains by supporting software development, automation, and productivity tools.

Companies like Jamf, Kaseya, Dell Technologies, and others have also carried out layoffs in recent months, often citing efficiency goals and the need to redirect investment toward future growth sectors such as AI.

IBM’s announcement follows a broader trend across the tech sector, as companies recalibrate workforce structures to meet the demands of an AI-driven economy.