IBM will cut thousands of jobs worldwide in Q4 2025 as it seeks to scale its high-margin software, AI, and cloud bets. The company said it would make “a low single-digit percentage reduction” of its roughly 270,000 global workforce — a figure that could mean as many as around 2,700 workers or more. Some job cuts may impact U.S. positions, but IBM anticipates that its overall hiring in the U.S. will remain flat year-over-year. This comes after previous layoffs in May 2025, when IBM cut approximately 8,000 jobs – mainly in human resources – as AI automation was taking over similar job responsibilities.
The company has been pivoting away from its slower-moving lines of business under CEO Arvind Krishna, in favour of faster-growing operations like AI consulting, software development, and cloud computing. IBM has noted a 10% rise in software revenue over the past few quarters, so confidence in its new move is justified. The layoffs primarily affect positions in architecture, engineering, marketing, and communications, as well as other non-customer-facing functions such as energy modelling, alongside job creation. This prioritizes the company’s software development and sales employees required to support growth areas.
These changes are part of a larger pattern in the tech industry, with major companies cutting costs to deliver more efficiency and focus on artificial intelligence and software. Amazon, Microsoft, Meta, and Google have led similar workforce reductions as they shift to an AI-driven growth strategy. IBM executives have spoken openly about how AI is impacting the workforce, saying it has overhauled thousands of ‘mundane’ positions and allowed for reinvestment in high-demand technical talent.
While pressured by slower growth in certain areas of the cloud market, IBM has vowed to move quickly on its turnaround plan by cutting legacy units and focusing on AI and cloud software platforms. The company intends to support displaced employees through transition programs, including career counselling and outplacement services. This reorientation is part of an ongoing strategic refocus that seeks to position IBM for long-term growth in the face of a rapidly changing tech landscape, one that focuses more on digital transformation and scalable software services than on traditional hardware domination.
Background on IBM Job Cuts and Strategic Shift
- IBM workforce: Approx. 270,000 employees globally as of the end of 2024.
- Job cuts expected: Low single-digit percentage (~2,700+ employees).
- Timeline: Layoffs scheduled for Q4 2025.
- Affected areas: Non-customer-facing roles, including architecture, engineering, HR, marketing, and communications.
- Growth focus: AI-driven cloud services, software development, and sales.
- CEO: Arvind Krishna, driving AI and software-led transformation since 2020.
Industry Context and Similar Moves
- Amazon recently announced plans to cut 14,000 corporate jobs.
- Microsoft cut several thousand engineering roles.
- Meta reduced roles in its AI division.
- Industry trend toward efficiency via automation and AI-driven restructuring.
Financial and Operational Impact
- IBM recently reported a 10% increase in software revenue.
- AI tools replaced about 200 HR roles earlier in 2025.
- The company reported a 9% sales increase in the recent quarter to $16.33 billion, beating expectations.
- Focus on shifting budget and talent to AI and cloud software innovation.
Employee Impact and Support
- Some U.S.-based roles were affected, but the overall U.S. workforce remained stable.
- Support includes outplacement assistance and career counselling.
- IBM continues to hire in areas of AI and software growth to align its workforce with future demands.
As part of its long-term plan to reduce costs while expanding into new areas, IBM is leveraging AI as both a business opportunity and a means to transform the way people work.