IBM says it will pause hiring as CEO says around 7,800 non-customer facing roles could be replaced by AI and automation in the next five years
- ‘Back office’ roles, which include Human Resources, equal roughly 26,000 jobs
- Tasks which can be replaced involve provision of employment verification letters
- It comes as the collapse of Silicon Valley Bank sparked fears about tech layoffs
- From January to March, the tech sector experienced 102,391 layoffs
Computing giant, International Business Machines Corp (IBM) has said it plans to pause hiring for roles that could be replaced with artificial intelligence in the next five years.
Arvind Krishna, CEO of IBM, said that up to 30% of non-customer-facing roles – tallying a figure of roughly 7,800 jobs – could be replaced by AI and automation in the near future.
These ‘back-office functions’, which include human resources, amount to a total of roughly 26,000 workers within the company, Krishna added.
From January to March, companies announced 270,416 job cuts – with the technology sector accounting for more than a third of the cuts in the first quarter at 102,391 layoffs – a 396 percent increase from the same period last year, according to a report on April 4 from outplacement firm Challenger, Gray & Christmas.
Tasks which can be replaced involve providing employment verification letters or moving employees between departments.
Computing giant, International Business Machines Corp (IBM) has said it plans to pause hiring for roles that could be replaced with artificial intelligence in the next five years
Arvind Krishna, CEO of IBM, said that up to 30% of non-customer-facing roles – tallying a figure of roughly 7,800 jobs – could be replaced by AI and automation in the near future
Other HR functions, however, such as evaluating workforce composition and productivity, won’t be replaced within the decade, he explained.
IBM’s plan is one of the most drastic workforce strategies announced in response to rapidly advancing automation technology.
Job advice platform Resumebuilder.com surveyed 1,000 business leaders who either use or plan to use Microsoft AI breakthrough, ChatGPT.
It found that about half of their companies have implemented chatbots. And nearly half of this group say that ‘ChatGPT has already converted employees at their companies’.
‘As this new technology is growing in the workplace right now, workers definitely need to think about how it may affect their current job responsibilities,’ Stacey Haller, chief career advisor at Resume Builder was quoted as saying in the report.
IBM currently employs 260,000 workers and is still hiring for software development and customer-facing roles.
The company announced job cuts at the start of this year, which could amount to 5,000 workers.
Despite this, Krishna said that IBM has overall expanded its workforce to about 7,000 people in the first quarter.
The CEO, who has held the position since 2020, has placed his focus for the hundred-year-old company on software services such as hybrid cloud – where applications are run using a combination of computing, storage, and services in public and private clouds.
He has moved attention away from managed infrastructure and wealth, and is considering selling the company’s weather unit.
It comes as the collapse of Silicon Valley Bank (SVB) in early march sparked fears about layoffs within the tech sector.
The Federal Deposit Insurance Corporation (FDIC) seized SVB’s assets on March 10 after depositors – mostly tech workers and start-up firms – began withdrawing their deposits from the bank following the shock announcement of a $1.8bn loss.
With around $209bn in assets, SVB is the second-largest bank failure in US history after the 2008 collapse of Washington Mutual. The crash could decimate the tech sector as many start-ups use SVB as their sole account and creditor.
Many companies have also slash costs in response to slower economic growth, after the Federal Reserve rapidly hiked interest rates over the past year in a campaign to curb inflation.
From January to March, US companies announced 270,416 job cuts, a 396 percent increase from the same period last year, according to a report in April
‘With rate hikes continuing and companies’ reigning in costs, the large-scale layoffs we are seeing will likely continue,’ said Andrew Challenger, senior vice president of Challenger, Gray & Christmas.
Among the major layoff announcements in the tech sector were cuts at Amazon, which on January 5 said it was eliminating more than 18,000 roles in an extension of previously announced layoffs.
On January 21, Google parent Alphabet said it planned to cut about 6 percent of its global workforce, equating to about 12,000 jobs.
And in a company-wide memo in April, Aphabet CFO Ruth Porat announced a sweeping array of penny-pinching measures to slash costs.
Porat detailed how Google is cutting back on expenses such as fitness classes for its employees, office basics from staplers and tape, and reducing the frequency of laptop replacements for its workers.
As well, Mark Zuckerberg famously declared 2023 would be the ‘Year of Efficiency’ at Facebook parent company Meta, saying in March that the company plans to cut 10,000 more jobs after a slightly larger round of layoffs in November.
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