Arvind Krishna on Tech Layoffs: IBM CEO Reveals What’s Driving the Industry Cuts

In an interview with The Verge, IBM CEO Arvind Krishna stated that artificial intelligence is not the primary reason for the current wave of layoffs in the tech sector. Rather, he attributed the latest job losses to a "natural correction" and blamed the pandemic's overhiring.

According to Krishna, who has been in executive positions at IBM since 1990, several tech companies had a sharp growth in workers between 2020 and 2023. He told The Verge that he believes that some of this is occurring at the moment because, based on the overall employment figures, he believes that people are overworked. "I said that both during and the year following the pandemic. Workers claiming, "I don't need so many people because I went up 30, 40, 50, or 100% from 2020 to 2023," accounts for a portion of the displacement, he continued.

Business is Never Completely Optimised- Krishna

There would be some natural adjustment, Krishna said while emphasising further. No business is ever fully optimised. In my opinion, the system is underdamped from an engineering perspective. It goes above and beyond when necessary. It must now be fixed. Depending on market growth and demand, it will most likely fall below what is required before reaching the proper equilibrium.

This year, IBM itself revealed plans to eliminate thousands of positions as it turns its attention to software and artificial intelligence consulting. According to a statement seen by Reuters, the business stated that the layoffs will affect "a low single-digit percentage" of its 270,000 global employees, but it did not identify the precise number of positions impacted.

Krishna responded that while some job displacement is possible, it won't be significant when asked about the long-term effects of AI on employment. "Is it possible that up to 10% of jobs would be lost? I think that will probably happen in the coming years. Although it isn't 30 or 40%t, it can account for up to 10% of all US jobs. In some places, it is highly concentrated," he stated.

Krishna Argues Over AI Taking Over Human Jobs

Krishna added that businesses will eventually hire more workers, albeit in different kinds of positions, as artificial intelligence increases efficiency. As the firm's output has expanded, he continued, businesses will now hire more individuals, but in different areas. Because individuals claim that an AI agent can perform entry-level tasks, companies are recruiting more people. "I’m looking at them like, 'Really?' Think strategically for a moment," the CEO said.

The CEO of IBM warned against seeing AI as a means of reducing the need for entry-level workers. This strategy, he said, was "shortsighted". He elaborated on the idea, saying that wouldn't it be preferable to have an entry-level employee who is more like a ten-year specialist thanks to AI? Isn't that more beneficial to the business than the reverse? If not, where is the talent that will create the next big product? Where will the person be able to persuade a client to implement technology in the proper manner? He said, "That's why I think some are being shortsighted."