A lot of people are saying that AI is the main reason why so many tech jobs are being cut right now, but IBM CEO Arvind Krishna disagrees. Instead, he says the industry is just settling down after a flood of hires during the pandemic, which he calls a natural correction.
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Speaking to The Verge, the long-time boss of IBM, who started the company in 1990 and became CEO in 2020 and chairman the next year, said that the rapid growth of 2020–2023, which is a big reason for the recent job cuts at major tech companies. He said that AI is changing the job market, but it’s not the main reason for the current round of layoffs.
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Pandemic over-hiring is cutting jobs, not AI.
Krishna said that many companies hired a lot of people during the pandemic boom, way more than they could afford to. As he put it, I believe people were hungry for work… Some people are moving because they don’t need as many people now that their income went up by 30, 40, 50, or even 100% from 2020 to 2023. He said that the industry’s cycle is like an underdamped system because it overshoots during times of high demand and then settles down again.
IBM has said that it will be laying off some employees this year as it moves resources to places with a lot of growth, like AI-focused services and software. The company didn’t say how many jobs would be cut, but it did say that the cuts would only touch a small fraction of its 270,000 workers around the world.
The Long-Term Effects of AI
When Krishna talked about AI’s bigger effect on jobs, he admitted that robotics will change some types of jobs. He told The Verge, Do you think that up to 10% of jobs will be lost? That’s what I think will happen in the next few years. It’s not 30% or 40%, but it’s up to 10%… It is mostly found in a few places.
He did say, though, that higher production will not get rid of all jobs, but rather create new ones. That companies often get it wrong when they try to use AI: “I don’t need to do the entry-level task because an AI agent can do it.”
But the CEO says that seeing AI as a quick way to get rid of low-level jobs is fundamentally wrong.
Why it’s not smart to cut entry-level workers
Krishna wasn’t happy with companies that used AI to cut costs at the bottom level. “Wouldn’t you rather hire someone new and have AI make them more like a 10-year expert?” “Where are the creative people who will make the next big thing?” His point was that if companies don’t help workers in their early careers, they could miss out on future leadership and creativity.
He also told CNN that IBM plans to hire more college graduates next year, which goes against the general trend of hiring cuts. He said, “I think we’ll hire more college graduates in the next year than we have in the last few years.”
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