AI Automation at IBM: Unexpected Job Growth

IBM‘s 2023 decision to lay off nearly 8,000 employees, primarily in human resources, to implement an AI-powered HR system, AskHR, sent shockwaves through the tech industry. The move, initially perceived as a drastic cost-cutting measure, yielded surprising results, highlighting the complex interplay between automation and human capital.

AskHR successfully automated approximately 94% of routine HR tasks, including vacation requests and payroll management. This resulted in a reported $3.5 billion productivity increase across over 70 job roles. While the layoffs were significant, IBM’s overall workforce didn’t shrink as anticipated. Instead, it expanded.

CEO Arvind Krishna attributed this unexpected growth to the reallocation of resources freed by automation. These resources were invested in high-value areas like software engineering, marketing, and sales—roles requiring human creativity and critical thinking, less susceptible to automation. This strategic shift reflects IBM’s commitment to leveraging AI to enhance, not simply replace, human expertise.

AskHR’s success is undeniable. In 2024, the platform handled over 11.5 million interactions, dramatically improving customer satisfaction scores from a negative net promoter score (NPS) of -35 to +74. However, approximately 6% of requests still require human intervention, underscoring the limitations of complete AI-driven HR.

IBM’s experience underscores a broader trend: AI is not simply eliminating jobs but reshaping them. Routine tasks are automated, while demand for skilled professionals in AI development, implementation, and sales increases. This transition necessitates investment in employee retraining and reskilling initiatives, a lesson learned by other companies, such as Duolingo, who experienced initial automation setbacks.

IBM’s transformation serves as a case study in navigating the complexities of AI integration. The company’s strategic approach—balancing automation with human expertise—demonstrates a path toward leveraging AI for productivity gains while fostering workforce growth and innovation. By automating routine tasks, IBM has not only streamlined its operations but also redefined the future of work within its global team of over 270,000 employees.