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IBM was in the news recently for having laid off 8,000 workers as part of its aggressive attempt to infuse everyday business practices with AI. The intention was straightforward: “automate tasks, cut costs, and increase efficiency.” What actually happened was rather different, however. As it turns out, the AI systems that were used were not yet advanced enough to completely replace the functions of human labour, which resulted in acute operational difficulties. In a dramatic reversal, IBM started hiring similar numbers of employees to replace the missing productivity and skill set. This event has reignited a debate over how far AI can go in the workplace and if businesses are moving too fast into automation without being adequately prepared. Here's what happened and what it portends for work in the future.

IBM Replaces 8,000 HR Jobs With AI, But Overall Workforce Grows in 2024

In 2023, IBM led the news by dismissing almost 8,000 workers, with the majority being part of its Human Resources (HR) team. The company did this in response to a strategic realignment to use a custom artificial intelligence platform to automate repetitive HR functions called AskHR. Created in-house at IBM's headquarters in Armonk, New York, the system was intended to manage tasks such as vacation requests, payroll, and employee documentation.

Despite the massive job cuts, IBM’s overall headcount increased, reflecting a major realignment of roles rather than simple cost-cutting.

AskHR: AI Handling 94% of Routine HR Tasks

IBM's AskHR platform was extremely effective, processing 94% of standard HR tasks. Because of it, the firm saw a $3.5 billion increase in productivity, crossing more than 70 job categories. This follows overall tech trends where firms such as Google and Spotify have employed AI to simplify backend operations and minimize non-core staffing.

In 2024 alone, AskHR handled over 11.5 million employee interactions, dramatically improving satisfaction ratings — IBM’s internal net promoter score (NPS) rose from -35 to +74 in just a few years.

Employment Growth Despite Layoffs

Contrary to expectations, IBM’s total workforce grew after the layoffs. CEO Arvind Krishna told The Wall Street Journal, “Our total employment has actually gone up, because what [AI] does is it gives you more investment to put into other areas.” These included:

  • Software Engineering

  • Marketing

  • Sales and Client Relations

The company redirected cost savings from automation to hire in roles demanding creativity, human interaction, and complex decision-making — domains still difficult for AI to fully replicate.

AI Doesn’t Just Replace Jobs — It Redefines Them

IBM’s case illustrates a wider shift in the workforce. While AI eliminates routine jobs, it simultaneously creates demand for people who can:

- Design and build AI systems

- Market and sell AI-powered solutions

- Support users through more complex scenarios

Other firms have faced challenges automating too aggressively. Duolingo, for example, had to rehire staff after chatbots failed to meet expectations, highlighting that full automation can backfire without human oversight.

The Future of Work: Balancing Humans and Machines

IBM's changing model stresses balance. Automation improves efficiency, but 6% of HR requests still need a human touch, demonstrating that AI cannot solve all problems.

As IBM continues to redefine its 270,000+ worldwide workforce, its story is the playbook for other companies at the convergence of technology and talent. CEO Krishna put it best: “Automation enabled us to invest more where human creativity and interaction are required.”