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IBM is cutting thousands of jobs as it pivots toward AI and software. The tech giant’s restructuring highlights a major shift in Big Tech’s new priorities.
IBM is slimming down again. This time, thousands of jobs are at stake as the 114-year-old tech giant continues to pivot toward faster-growing software and AI-driven services.
The layoffs will impact a “low single-digit percentage” of IBM’s global workforce of about 270,000 employees, the company confirmed. This figure suggests the number of jobs being cut could be anywhere from approximately 2,700 to over 5,000.
“We routinely review our workforce through this lens and at times rebalance accordingly. In the fourth quarter, we are executing an action that will impact a low single-digit percentage of our global workforce,” an IBM spokesperson told Bloomberg.
While some US-based employees will be affected, the company anticipates that its overall US employment will remain relatively unchanged year over year. Reports indicate a significant portion of the reductions may be focused on the US infrastructure group. Those employees notified of a “Resource Action” are reportedly given 30 days to find a new internal position or face termination with severance.
The job cuts are part of a strategic move led by CEO Arvind Krishna to focus on higher-margin areas, such as software and cloud services, which include the acquired Red Hat division. This push comes even as the company’s consulting division has struggled amid broader economic concerns.
The emphasis on software follows a strong performance in IBM’s recent earnings report, where software revenue jumped 10%. However, growth in a key part of the hybrid cloud business, Red Hat, has recently slowed, which analysts believe could be a factor prompting the current restructuring.
The company is actively reinvesting in higher-growth areas, such as software development, sales, and its generative AI platform, watsonx. Conversely, reports from insiders suggest the deepest cuts are heavily hitting the infrastructure division, with one source estimating a reduction of nearly 50% within IBM’s US infrastructure group.
IBM is not alone in streamlining its workforce. The tech industry has seen a wave of layoffs in 2025 as major companies reposition themselves to focus on AI and cut costs.
Other tech giants have recently announced massive job cuts, including Amazon, which plans to eliminate 14,000 corporate roles. Earlier this year, IBM itself utilized AI agents to automate the work of a couple of hundred human resources employees, shifting its hiring to more technical and sales-focused roles.
The decision to cut thousands of jobs, even after posting stronger-than-expected earnings, highlights the industry-wide push to become leaner and more focused on the highly profitable AI and cloud computing segments.
Aminu Abdullahi is a B2C and B2B technology and finance writer with more than six years of experience covering enterprise IT, cybersecurity, cloud computing, artificial intelligence, fintech, business software, and emerging technologies. His work has appeared in publications including TechRepublic, eWEEK, Channel Insider, Geekflare, Enterprise Networking Planet, eSecurity Planet, CIO Insight, and Webopedia. With a technical background in computer science, he specializes in translating complex technology topics into clear, accessible content for business leaders and decision-makers.
