IBM to cut thousands of jobs as focus shifts to software services

IBM reported a slowdown last month in its core cloud software segment, sparking concern among investors who had been banking on the company's capacity to capitalise on the demand for cloud services

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Technology giant IBM is set to eliminate thousands of positions as it redirects attention towards its high-margin software division, Reuters reported on Wednesday. The layoffs are expected to take place this quarter as the company intensifies its focus on software and services.

 

“We routinely review our workforce through this lens and at times rebalance accordingly,” a company spokesperson was quoted as saying.

 

“In the fourth quarter, we are executing an action that will impact a low single-digit percentage of our global workforce,” the spokesperson said.

 

Under Chief Executive Arvind Krishna, IBM has deepened its focus on software to capitalise on rising expenditure in cloud services through its ‘Red Hat’ division, as firms integrate artificial intelligence into their operations.

 

However, IBM reported slower growth last month in its key cloud software business, raising concerns among investors who have been betting on the company’s ability to capture more value from surging cloud demand. Shares of IBM, which have climbed more than 35 per cent this year, declined nearly 2 per cent on Tuesday.

 

The company employed around 270,000 people as of the end of 2024.

 

Tech layoffs surge

 

Over the past few months, several major technology companies, including Amazon, Tata Consultancy Services (TCS) and Microsoft, have announced layoffs as the industry shifts focus to artificial intelligence.

 

According to Layoffs.fyi, a platform tracking global tech industry job cuts, more than 112,732 employees have been laid off across 218 technology companies in 2025 so far.

 

Amazon job cuts 

Last week, Amazon announced plans to reduce its global corporate workforce by approximately 14,000 roles, with further job reductions anticipated next year.

 

TCS layoffs 

Tata Consultancy Services (TCS), India’s largest IT services firm, saw its total headcount decline by 19,755 to 593,314 as of the second quarter of the financial year 2025-26.

 

Microsoft workforce reduction 

Microsoft has reportedly cut nearly 4,000 software engineering positions amid the growing adoption of artificial intelligence (AI), Bloomberg reported. The company is expected to eliminate around 6,000 jobs across its divisions, with over 30 per cent of the layoffs based in Washington.

 

Microsoft boss Satya Nadella said the technology major plans to expand its workforce in the future but will do so with a “more strategic and leveraged approach” following the AI transformation.