IBM is set to trim thousands of jobs worldwide in the fourth quarter of 2025 as part of a major strategic shift toward artificial intelligence, cloud computing, and software-driven growth. The company confirmed that the layoffs would affect a “low single-digit percentage” of its global workforce, reflecting an industry-wide trend of restructuring amid accelerating AI adoption.

The move comes after a strong financial performance in recent quarters. IBM recently reported a 10 percent rise in software revenue, signaling steady progress in its digital transformation journey. “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 a popular publication.

With approximately 270,000 employees at the end of 2024, a 1 percent reduction translates to roughly 2,700 roles. The company emphasized that the job cuts are part of routine workforce optimization efforts aimed at aligning staff with evolving business priorities.

Managers who decline to relocate or fail to secure roles approved for remote work have been asked to “separate from IBM.” While some U.S.-based positions may be affected, IBM noted that its overall U.S. employment levels are expected to remain broadly stable, as the company continues hiring in high-growth areas such as AI, hybrid cloud, and enterprise software.

Under the leadership of CEO Arvind Krishna, who took the helm in 2020, IBM has been systematically shifting away from its legacy hardware and infrastructure services. The company’s focus is now firmly on developing generative AI models, expanding hybrid cloud capabilities, and deepening its software portfolio—all areas it considers vital for long-term success.

Krishna has been open about the growing influence of AI within IBM’s operations. He previously revealed that AI-powered tools have already automated tasks equivalent to the work of around 200 human resources employees. This automation, he noted, allows IBM to reinvest in hiring more software engineers and customer-facing professionals, aligning with its broader strategy of innovation-led growth.

IBM’s restructuring mirrors a broader wave of layoffs across the global technology sector. Amazon, Meta, and Microsoft have all implemented job cuts in 2025 as part of cost-optimization measures tied to AI and automation initiatives. According to industry tracker Layoffs.fyi, over 112,700 tech workers have been laid off this year across 218 companies worldwide.

Despite its stock climbing more than 35 percent in 2025, IBM has seen some deceleration in its cloud software growth. The current workforce adjustments appear designed to reallocate resources toward business segments that promise higher returns and long-term scalability.

By doubling down on AI and cloud, IBM aims to strengthen its competitive position in a market increasingly defined by automation, intelligent software, and digital-first strategies. The company’s latest move reflects both the challenges and opportunities of the ongoing AI revolution—where efficiency, adaptability, and innovation have become the cornerstones of sustained growth.