IBM Axes Employees 8,000 for AI Gains, Then Quietly Rehires to Plug Gaps

IBM made news throughout the world in 2023 when it laid off almost 8,000 workers; the majority of them were from its human resources department.

 The step was taken to introduce AskHR, a proprietary AI platform intended to automate tedious administrative tasks. However, rather than reducing its personnel overall, IBM ended up recruiting the same number of people again, this time in fields that were far different from traditional human resources.

 According to a recent Wall Street Journal interview with CEO Arvind Krishna, the shift exposes a deliberate workforce pivot: automate basic tasks and reinvest in positions that call for human ingenuity, problem-solving, and customer interaction.

AskHR Changing the Business Dynamics

Payroll administration, vacation requests, and employee paperwork were among the procedures that AskHR was designed to expedite. Approximately 94% of these jobs are currently handled by the AI system, which recorded over 11.5 million encounters in 2024 alone.

The effect was not just functional; IBM's net promoter score increased from -35 to +74, indicating a notable increase in customer satisfaction. It was also difficult to overlook the productivity benefits. According to IBM, automating HR functions increased productivity across more than 70 job types worldwide by $3.5 billion.

The headcount, however, was unexpected. In fact, IBM's overall workforce increased in spite of job layoffs. "We have more employees overall," Krishna told a media house.

"Investing in human-touch areas like software engineering, sales, and marketing is made possible by AI." This change reflects a larger trend in the industry: AI is changing employment rather than just replacing it. As the need for individuals capable of designing, implementing, and commercialising AI-driven solutions increases, routine positions are gradually being phased out.

IBM's message is clear: if companies are willing to rethink their workforce and make strategic investments, automation may be a growth engine.

Other Companies Following the Similar Path

Similar changes have been tried by other businesses, with varying degrees of success. For example, the language-learning app Duolingo relied largely on AI chatbots but discovered that the technology was not able to completely replace human teachers.

Rehiring was necessary to cover service shortfalls. By recognising AI's limitations—roughly 6% of HR-related enquiries still need human assistance—IBM was able to avoid these pitfalls.

Because a long-term talent strategy was used in its implementation, the AskHR platform was successful.

Automation Tool for Innovation

IBM viewed automation as a tool for innovation rather than as a way to reduce costs. Its choice to replace HR duties marked the beginning of a new hiring cycle that prioritised high-impact, less automatable positions rather than the conclusion of the discussion.

 IBM's strategy provides business transformation and HR professionals with a roadmap as well as a warning. Roles will be eliminated by automation, but more future-ready professions can and should take their place.

Reskilling, internal mobility, and rethinking personnel strategies to focus on company value rather than just operational efficiency are crucial.

Today, IBM has more than 270,000 employees worldwide. It has demonstrated that a net loss of jobs need not result from even severe automation. Instead, it calls for flexibility in both people strategy and technology adoption.

The company's shift to AI exemplifies the nature of labour in the future, which is more about reallocating talent than it is about cutting staff.

IBM distinguishes itself for using automation as a catalyst for workforce transformation rather than merely a crude instrument for downsizing in a time when artificial intelligence is drastically changing the nature of jobs.