IBM announced plans to reduce its workforce by approximately 3,900 employees and refocus its strategic direction toward hybrid cloud and artificial intelligence software, the company disclosed November 25, 2024. The cuts represent roughly 3.5% of IBM’s global staff of 110,000.
The restructuring signals a continued shift away from legacy hardware and consulting services toward higher-margin software offerings. While IBM remains a significant player in IT infrastructure, the company aims to accelerate growth in areas like its Red Hat hybrid cloud platform and AI capabilities, including its Watson portfolio.The move impacts employees across various geographies and functions, with severance and outplacement services to be provided.
IBM expects to incur $600 million in restructuring charges related to the layoffs by the end of 2025. The company’s third-quarter 2024 earnings,reported prior to the declaration,showed modest revenue growth of 6.4% to $14.77 billion, driven by software sales.
“IBM is constantly evolving to meet the demands of a changing market,” saeid Arvind Krishna, IBM chairman and CEO, in a statement. “These actions will allow us to focus our investments on areas with the greatest potential for long-term growth.”
Founded in 1911 as the Computing-Tabulating-Recording Company, IBM has undergone numerous transformations throughout its history. Once dominant in mainframe computers, the company has adapted to evolving technologies, including personal computers, software, and now cloud computing and AI. The latest restructuring reflects a broader trend in the tech industry, where companies are streamlining operations and prioritizing investments in emerging technologies.
