IBM CEO Arvind Krishna says not due to AI, many companies are laying off but because they …

IBM CEO Arvind Krishna attributes current tech layoffs to pandemic-era over-hiring, not AI, calling it a "natural correction." While acknowledging AI will cause some job displacement, Krishna believes increased productivity will lead to new roles and overall hiring growth, particularly for college graduates.
IBM CEO Arvind Krishna has refuted the narrative that the current wave of mass layoffs across the tech industry is primarily due to the artificial intelligence (AI) technology, arguing that the job cuts are largely a “natural correction” following over-hiring during the pandemic years. Krishna, however, acknowledged that AI will eventually lead to some job displacement, but suggested that many companies are currently laying off staff because they overhired between 2020 and 2023. In an interview with The Verge, Krishna used strong terms to describe the rapid staffing increases across the industry during the lockdown era. "If you look at the total employment numbers, I think people gorged on employment... during the pandemic and the year after," Krishna explained. He noted that some companies saw their employee count spike by "30, 40, 50, 100 percent" from 2020 to 2023. “There is going to be some natural correction. Business is never completely optimized. 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,” the CEO noted. Notably, earlier this year, IBM announced that it will lay off thousands of employees from its global workforce in the fourth quarter in 2025. It was reported that the company will layoff about 1% of its total workforce – around 2700 employees – by the end of this year.
Krishna says AI-led jobs cuts will not be catastrophic
Talking about the long-term impact of AI on employment, Krishna projected a significant but manageable level of job displacement over the next couple of years. “Could there be up to 10 percent job displacement? I believe that’ll be likely over the next couple of years. 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," he said. Krishna also believes that as AI increases overall productivity, companies will ultimately hire more people, though in different roles. “Now, as you get more productive, companies are going to then hire more people but in different places. We are hiring more because people say, “I don’t need to do the entry-level task because an AI agent can do it.” I’m looking at them like, “Really?” Think strategically for a moment,” the CEO noted. Krishna criticised companies that are looking to AI primarily as a cost-cutting measure for entry-level tasks, calling the approach "shortsighted." “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? 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,” he noted. Last month, Krishna said that the company will continue to hire more college graduates. “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, so you’re going to see that,” Krishna told CNN.
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