IBM ambitious push toward AI-driven automation has taken an unexpected turn.
After laying off nearly 8,000 employees in 2023—primarily from its human resources (HR) division—the tech giant has now begun rehiring staff to fill critical gaps left by automation.
The layoffs were part of IBM’s strategy to streamline operations and cut costs using its AI-powered AskHR platform, which was designed to handle routine HR tasks such as payroll queries, leave approvals, and documentation.
However, the system failed to fully replace human judgment and empathy, leading to operational inefficiencies and a decline in service quality.
The AI-Driven Layoffs at IBM and Their Consequences
IBM’s AskHR platform was expected to automate 94% of standard HR tasks, significantly improving efficiency.
However, the remaining 6% of tasks—which required human discretion, emotional intelligence, and nuanced decision-making—created operational gaps that negatively impacted employee satisfaction and productivity.
Despite the layoffs, IBM’s total workforce did not shrink as anticipated.
Instead, the company redirected savings from automation into hiring software developers, sales professionals, marketing experts, and client relations specialists—roles that demand creativity, strategic thinking, and interpersonal skills.
IBM’s Rehiring Strategy and Industry Impact
IBM’s decision to reintroduce human roles highlights the limitations of AI in handling complex workplace interactions.
The company’s CEO, Arvind Krishna, acknowledged that AI-driven automation freed up resources, allowing IBM to invest in high-value roles rather than simply cutting costs.
IBM’s experience serves as a cautionary tale for businesses embracing AI.
While automation can enhance productivity, it cannot fully replace human insight in complex or nuanced scenarios.
Other companies, including Duolingo, have faced similar challenges, where heavy reliance on AI chatbots forced them to rehire staff after automation failed to meet expectations.
IBM Layoffs and Rehiring: The Debate Over Automation Limits
IBM’s AI-driven layoffs and subsequent rehiring have reignited discussions on the future of automation and its impact on employment.
While AI can streamline repetitive tasks, experts argue that human oversight remains essential in areas requiring judgment, creativity, and emotional intelligence.
The AskHR platform, which handled over 11.5 million employee interactions in 2024, significantly improved efficiency and employee satisfaction.
However, IBM’s experience underscores the need for businesses to balance AI integration with human expertise.
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