The company confirmed the development on Tuesday, noting that the cuts will affect a “low single-digit percentage” of its roughly 270,000 global employees. “We routinely review our workforce and at times rebalance accordingly,” IBM said in a statement, framing the decision as part of a broader efficiency and restructuring exercise.
While IBM has been expanding its software and cloud computing capabilities through its Red Hat division, the company recently reported slower growth in its cloud segment — a core driver of investor confidence. The slowdown has raised concerns about IBM’s ability to fully capture surging demand for AI-integrated cloud solutions, particularly as rivals such as Microsoft and Google scale their own enterprise offerings.
Under CEO Arvind Krishna, IBM has aggressively shifted its strategic focus away from legacy hardware operations toward digital transformation tools, hybrid cloud services, and AI innovation. Analysts say the job cuts are likely aimed at freeing resources for investments in these fast-growing areas, aligning with Wall Street’s expectations of higher margins and improved operational agility.
Despite a 35% rise in IBM’s stock value this year, shares slipped nearly 2% on Tuesday following the announcement. The company added that U.S. employment levels are expected to remain largely stable year over year, even as some American workers are affected by the layoffs.
Bloomberg News was first to report the planned workforce reductions.