IBM intends to lay off thousands of employees as it redirects its emphasis towards more lucrative sectors in artificial intelligence consulting and software.

The firm did not indicate the number of employees that would be impacted, but mentioned in a statement that the job cuts would "affect a low single-digit percentage of our worldwide workforce." At the close of the previous year, the company employed 270,000 staff members.

Reports indicate that the workforce in the United States is anticipated to stay unchanged despite certain layoffs.

A significant provider of technology for businesses, IBM aligns with Amazon, Meta, Google, and others that have recently reduced their workforce while striving to invest further in the AI surge. Numerous executives have forecasted additional efficiency improvements as the technology aids employees with coding and various tasks.

Nevertheless, the benefits for businesses relying on AI products like chatbots remain uncertain, and some analysts caution about a possible bubble.

IBM announced two weeks ago that its sales increased by 9percent to $16.33 billion for the period from June to September. The outcomes surpassed analysts' predictions.

During a conference call with analysts last month, Jim Kavanaugh, IBM's CFO, stated that there were indicators suggesting that the adoption of AI in mainstream companies was starting to speed up. He added that approximately 80percent of IBM's clients for AI consulting and software were new in the past six months.

IBM's AI consulting and software bookings soared to $9.5 billion in the third quarter, "highlighting robust momentum in A.I.-driven demand," as stated in a research report by the investment bank Jefferies.

For years, IBM has practiced what it refers to as "workforce rebalancing," letting go of certain employees while hiring others. The business did not reveal the costs for employee severance packages for the latest wave of layoffs.

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The firm stated it was reorganizing personnel and expertise in line with changing demand.

"We regularly assess our workforce through this perspective and occasionally make adjustments as needed," the statement said.

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Since Arvind Krishna took over as CEO in 2020, IBM has actively targeted rapidly expanding sectors in cloud computing for enterprises and artificial intelligence.

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The most significant action to concentrate on AI and cloud computing occurred the following year, when IBM separated its technology services division, which updates and sustains conventional software and hardware for business clients. That enterprise is now an independent firm, named Kyndryl.