‘I could easily see 30% workforce getting replaced by AI’: IBM CEO Arvind Krishna’s candid revelation on job losses

In recent years, many business leaders have been careful with their language when discussing artificial intelligence (AI), emphasizing that it will supplement, rather than replace, human work. However, IBM CEO Arvind Krishna has taken a more candid approach, telling Bloomberg in an interview that he expects AI and automation to replace up to 30 per cent of non-customer-facing roles at IBM over the next five years.

Krishna explained that the company plans to pause hiring for back-office functions, such as human resources, that could be replaced by AI and automation. These non-customer-facing roles account for approximately 26,000 workers at IBM, and Krishna believes that roughly 7,800 of these jobs could be lost as a result of the changes. Some of the reduction in the workforce will come from not replacing roles vacated by attrition.

“I could easily see 30 per cent of that getting replaced by AI and automation over a five-year period,” Krishna told Bloomberg.

Krishna anticipates that mundane tasks, such as providing employment verification letters or moving employees between departments, will likely be fully automated, while some HR functions, such as evaluating workforce composition and productivity, will probably not be replaced in the next decade.

While IBM plans to slow or suspend hiring for roles that could be automated, the company will continue to hire for software development and customer-facing positions. IBM currently employs about 260,000 workers and has added about 7,000 people in the first quarter of this year.

Krishna, who became CEO in 2020, has worked to focus IBM around software and services, such as hybrid cloud, and has divested lower-growth businesses, including managed infrastructure unit Kyndryl Inc. and part of the Watson Health business.

IBM exceeded profit expectations in its latest quarter, primarily due to effective management of expenses, which included the previously announced job cuts. The company is expected to save $2 billion a year in productivity and efficiency steps by the end of 2024, according to CFO James Kavanaugh.

Despite worsening macroeconomic concerns, Krishna believes that IBM's strong software portfolio, including its acquired unit Red Hat, will help it maintain steady growth. However, he now sees the potential for a "shallow and short" recession in the US toward the end of this year, compared to his earlier belief that the country could avoid a recession until late 2022.

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