In a significant intervention, IBM's Chief Executive Officer Arvind Krishna has challenged the widespread belief that the recent spate of mass layoffs in the technology sector is predominantly driven by the rise of artificial intelligence. Instead, he attributes the job cuts to a necessary market adjustment following a period of excessive hiring during the COVID-19 pandemic years.
Pandemic Hiring Binge Led to 'Natural Correction'
Speaking in an interview with The Verge, Krishna used vivid language to describe the industry's staffing surge between 2020 and 2023. "If you look at the total employment numbers, I think people gorged on employment... during the pandemic and the year after," he stated. He highlighted that some companies witnessed their workforce balloon by dramatic percentages—30, 40, 50, even 100 percent—during that period.
Krishna framed the current layoffs as an inevitable economic recalibration. "There is going to be some natural correction. Business is never completely optimized," he explained, using an engineering analogy. "I think in engineering terms, it’s an underdamped system. When there’s a need, it goes above. Now, it has to correct. It’s probably going to go below what’s needed, and then it’ll hit the correct equilibrium, depending on market demand and growth."
This perspective comes as IBM itself plans workforce adjustments. The company announced earlier this year that it would lay off thousands globally in the fourth quarter of 2025. Reports indicate that around 1% of its total workforce, approximately 2,700 employees, will be affected by the end of this year.
AI's Impact: Significant but Manageable, Not Catastrophic
While downplaying AI's role in the current layoff wave, Krishna did acknowledge that the technology will lead to job displacement in the coming years. However, he projected the scale to be substantial yet manageable, contradicting more alarmist predictions.
"Could there be up to 10 percent job displacement? I believe that’ll be likely over the next couple of years," Krishna said. He emphasized, "It’s not 30 or 40 percent, but it is up to 10 percent of the total US employment pool. It is very concentrated in certain areas."
The IBM CEO presented a counter-narrative for the long term, arguing that increased productivity from AI will ultimately lead to more hiring, albeit for different roles. "Now, as you get more productive, companies are going to then hire more people but in different places," he noted.
Criticising 'Shortsighted' Cost-Cutting with AI
Krishna reserved strong criticism for companies viewing AI primarily as a tool to eliminate entry-level positions to save costs, labeling this approach as "shortsighted." He advocated for using AI to augment junior employees rather than replace them.
"Wouldn’t you rather have an entry-level person and AI makes them more like a 10-year expert? Isn’t that more useful to me than the other way around?" he questioned. He stressed the strategic importance of nurturing talent: "Otherwise, where is the talent who’s going to come up with the next great product? Where is the person who’s going to be able to convince a client to deploy technology the way it should be deployed? That’s why I think some are being shortsighted."
Aligning with this philosophy, Krishna reaffirmed IBM's commitment to hiring fresh talent. Last month, he told CNN, "People are talking about either layoffs or freezing hiring, but I actually want to say that we are the opposite. I expect we are probably going to hire more people out of college over the next 12 months than we have in the past few years."
Krishna's comments provide a nuanced view of the complex forces reshaping the global tech job market, separating the immediate cyclical correction from the longer-term structural shifts driven by artificial intelligence.
