In a significant shift driven by technology, IBM made headlines in 2023 by laying off nearly 8,000 employees, primarily from its human resources department. This major reduction in workforce came as part of the company’s push to adopt artificial intelligence for routine HR functions. The goal was to streamline operations by replacing repetitive administrative tasks with a custom-built AI system called AskHR. This platform was designed to manage activities such as handling vacation requests, processing payroll, and organizing employee documents. The strategy, centered on IBM’s headquarters in Armonk, New York, aimed to boost efficiency and reduce operating costs.
AskHR delivered impressive results, successfully automating roughly 94 percent of the HR tasks it was assigned. As a consequence of this sweeping automation, IBM reported a massive $3.5 billion productivity boost across over 70 job categories. The decision to embrace AI not only saved time and resources but also reflected a growing trend in the tech industry. Several major companies, including Google and Spotify, have similarly adopted AI tools and automation systems to simplify internal processes and trim down support staff.
While such large-scale job reductions would typically shrink a company’s workforce, IBM’s experience defied expectations. Instead of seeing an overall decline in employment numbers, the company’s total staff count actually rose following the layoffs. IBM’s CEO Arvind Krishna, who has led the company since 2020, offered insight into this development during an interview with The Wall Street Journal. He said, “Our total employment has actually gone up, because what [AI] does is it gives you more investment to put into other areas.”
These “other areas” included departments where human skills remain essential—such as software development, marketing, and sales. Unlike roles centered on routine or rules-based tasks, these fields rely heavily on creative thinking, complex decision-making, and interpersonal communication. The investment freed up by automation allowed IBM to channel resources into hiring professionals for these high-value sectors.
Rather than viewing AI purely as a cost-cutting tool, IBM used it to enhance its business strategy by blending technological power with human insight. The company shifted its focus toward a hybrid model—automating the predictable while reinforcing areas that benefit from human innovation. New employees brought on after the HR downsizing were primarily specialists in programming, client engagement, and strategic marketing—roles that remain resistant to automation for the foreseeable future.
This transition at IBM offers a broader perspective on how technology is reshaping the world of work. Rather than simply erasing jobs, artificial intelligence is redefining the kind of roles that exist. Positions based on repetition and routine are increasingly being phased out, while those that require design, development, and personalized engagement are in greater demand. IBM’s experience serves as a powerful example of how AI not only transforms work functions but also influences the types of talent companies need.
The broader tech industry has seen similar dynamics. For instance, Duolingo, a language-learning platform that had heavily leaned on chatbot-based automation, eventually had to rehire staff when the technology failed to meet expectations. The shortcomings in AI implementation reminded companies that technology cannot fully substitute for human intuition, judgment, and creativity.
IBM’s AskHR platform offers a clear demonstration of both the strengths and limitations of AI. By 2024, the system had processed more than 11.5 million interactions. It also drastically improved internal satisfaction ratings, pushing its net promoter score (NPS) from a negative -35 to a very favorable +74 over just a few years. Despite the success, it’s worth noting that around 6 percent of user requests still required human intervention. This small but significant percentage revealed that AI cannot yet handle every scenario, especially those involving complex, sensitive, or unique circumstances.
The implementation of AskHR and IBM’s broader automation efforts underscore the delicate balance companies must maintain while adopting AI. The potential gains are substantial, but the transition must be managed with precision. CEO Arvind Krishna captured this nuance when he said the automation “allowed us to invest more in areas that need human creativity and interaction.” His comment highlights IBM’s dual focus: pursuing technological advancement while also nurturing the human element essential to innovation and customer engagement.
IBM’s evolving approach has had a profound impact on how work is distributed throughout its global network of more than 270,000 employees. Tasks once handled by dozens or even hundreds of HR personnel are now efficiently managed by algorithms. However, this has not led to a wholesale reduction in workforce. Instead, the company’s employment model has evolved to prioritize skills that complement automation rather than compete with it.
By reallocating talent and resources, IBM has transformed its internal structure without abandoning its human capital. This reshaping of the workforce reflects a strategic adaptation to technological disruption. It also sends a message to other companies navigating similar changes: automation, if applied thoughtfully, does not have to come at the expense of jobs. Rather, it can be a powerful force for creating new roles and expanding organizational capabilities.
In essence, IBM’s journey illustrates the broader evolution underway in today’s workplaces. As companies adopt AI to handle the mundane and the repetitive, they must also invest in cultivating skills that AI cannot easily replicate. These include emotional intelligence, complex problem-solving, and innovative thinking—all of which remain the domain of human workers.
IBM’s story provides a valuable case study in balancing innovation with workforce development. It demonstrates that automation and employment growth are not mutually exclusive. When managed correctly, one can fuel the other. By embracing AI to handle routine tasks, IBM not only streamlined its HR functions but also opened the door to new opportunities across its enterprise.
The company’s transformation highlights how technological disruption, while inevitable, need not be feared. With a thoughtful strategy, businesses can turn potential setbacks into progress—paving the way for a more dynamic and resilient workforce in the age of AI.