Job Cuts in Tech? IBM CEO Blames Pandemic, Not Artificial Intelligence

Arvind Krishna, the CEO of IBM, made it clear that, despite the cuts in the tech industry and the general job market, the cutting of jobs was not primarily attributable to the artificial intelligence (AI). In an interview with The Verge, Krishna said, rather the AI technologies have taken over the layoffs.

Back in 2020, Krishna pointed out how an aggressive expansion of workforce was the trend and that in the post-pandemic period it was primarily the over-hiring that caused the layoffs. He said, “Looking at the employment data over the pandemic years, it seems that companies had gorgeously fed themselves on employment… during COVID lockdowns and the year that followed after.” Some companies, however, he pointed out, increased their headcount very drastically i.e., by 30 to even 100 percent.

The head of IBM indicated that already the businesses are going through a process of natural correction. “There isn’t a complete optimization in a business. In engineering terms, it’s an underdamped system. When there’s a demand, it goes above. Now, it has to correct. Probably it’ll go below what’s needed and then it will hit the correct equilibrium depending on market demand and growth,” said Krishna.

On the job displacement front due to AI, Krishna was predicting a small impact over the next few years. “Could there be a disposition of jobs by up to 10 percent? I think this will be the case in the coming couple of years. It’s not a thing of 30 or 40 percent but up to 10 percent of all the employees in the U.S. Even though the impact is large it is mainly in a few areas,” he shared.

Losing jobs due to AI, however, was not something that Krishna considered a negative trend because he spoke of possible overall productivity gains resulting from AI and new opportunities being created in the end. He argued, “the more productive a company is, the more it will hire, although in different positions.” Tasks performed by AI will be the ones that release employees to perform higher-level responsibilities, he concluded.

Krishna's statements question the common view that AI has led to a huge number of layoffs. He rather points out the present cuts as mainly reflecting the resizing of the labor force after the pandemic that was characterized by large employments.