IBM is preparing for another wave of job cuts in the fourth quarter of 2025, signaling a continued shift toward automation and artificial intelligence-driven efficiency. The company confirmed that it will reduce a “low single-digit percentage” of its global workforce — a move that could affect roughly 2,500 to 3,000 employees based on IBM’s 270,000-strong global headcount.

A spokesperson stated that while some U.S. positions will be impacted, the company expects its total employment in the United States to remain flat compared to last year. This indicates that most of the reductions could occur across international operations, particularly in departments where automation has already taken root.

A strategic pivot toward AI efficiency

The decision aligns with IBM’s broader strategy of integrating AI into its operations and client services. Under CEO Arvind Krishna, IBM has leaned heavily into artificial intelligence, hybrid cloud computing, and enterprise automation since he took the helm in 2020. Krishna previously revealed that AI tools have already replaced around 200 human resource positions within the company, allowing IBM to redirect investments into areas like software development and sales.

The company’s shift toward AI efficiency is part of a wider industry trend. Tech giants such as Amazon and Meta have also been tightening headcounts while ramping up automation. Amazon announced plans to cut 14,000 corporate roles in 2024, while Meta’s AI division reduced about 600 employees. Both companies have cited efficiency and long-term profitability as driving forces behind their workforce reductions.

Strong performance despite workforce adjustments

IBM’s layoffs come on the heels of solid financial results. In its most recent quarterly report, the company posted stronger-than-expected earnings, driven by a 10% increase in software revenue — a segment that now accounts for nearly half of IBM’s total income. This growth helped offset weaker results in its traditional infrastructure and consulting units.

Despite job cuts, IBM continues to invest aggressively in AI products such as Watsonx, its enterprise AI platform launched in 2024. The company aims to position itself as a key player in helping businesses adopt generative AI technologies while improving internal productivity through automation.

A continuing cycle of restructuring

This latest downsizing follows earlier layoffs in marketing and communications departments in early 2024, part of an ongoing effort to streamline operations and pivot toward high-margin, tech-driven areas. Industry analysts note that IBM’s restructuring reflects the tech sector’s new normal — where automation and AI adoption are not only reshaping business models but also workforce composition.

While IBM insists that the layoffs represent a minor adjustment within a long-term growth plan, the move underscores a growing tension across the tech industry: balancing innovation and efficiency with the human cost of automation.

As IBM continues to refine its business around AI and cloud computing, the coming months will reveal how effectively it can leverage automation without sacrificing its human-driven innovation legacy.