IBM CEO Arvind Krishna has pushed back against theories that the current wave of mass layoffs across the technology industry is primarily due to artificial intelligence (AI) technology, arguing that layoffs are a “natural correction” primarily due to overemployment during the pandemic. But while Krishna acknowledged that AI will eventually lead to some job losses, he suggested that many companies are now laying off workers because they overhired between 2020 and 2023.In an interview with The Verge, Krishna explained in strong terms the rapid rise in headcount across the industry during the lockdown era.“If you look at the total employment numbers, I think people have gobbled up jobs… Krishna noted that during the pandemic and in the following year, some companies saw employee numbers jump “30, 40, 50, 100 percent” from 2020 to 2023.“There will be some natural correction. Businesses are never fully optimized. From an engineering perspective, I think this is an underdamped system. It goes up when it needs to, but now it needs to be corrected. It will probably be below what it needs to be. Then it will reach the right equilibrium depending on market demand and growth,” the CEO said.Notably, earlier this year, IBM announced that it would lay off thousands of employees worldwide in the fourth quarter of 2025. It was reported that the company will lay off approximately 1% of its total workforce (approximately 2,700 people) by the end of this year.
Krishna says AI layoffs won’t be catastrophic
Regarding the long-term impact of AI on employment, Krishna predicted that there will be significant but manageable job losses in the coming years.“Is it possible that there will be job losses of up to 10%? I believe that’s likely to happen in the next few years. It’s not 30% or 40%, but it’s up to 10% of the total U.S. job pool. It’s very concentrated in certain regions,” he said. Krishna also believes that as AI improves overall productivity, companies will eventually hire more people, even if in different roles.“As productivity increases, companies will hire more people, but in different locations. We’re hiring more because people say, “I don’t need to do these entry-level tasks because the AI agents will do them for me.” I’m looking at it like, “Is it true?” Think a little strategically,” the CEO said. Krishna criticized companies for focusing on AI primarily as a cost-cutting measure for entry-level tasks, calling this approach “short-sighted.”“If you have an entry-level person, and AI makes them closer to a 10-year expert, wouldn’t that be more beneficial to me than the other way around? Otherwise, where are the people who are going to come up with the next great product? Where are the people who are going to convince clients the way they should implement the technology? That’s why I think some people are short-sighted,” he pointed out.Mr. Krishna said last month that the company would continue to hire college graduates. “People are talking about either layoffs or hiring freezes, but I would actually say it’s the opposite. We’ll see that because we expect to hire more college graduates in the next 12 months than we probably have in the last few years,” Krishna told CNN.
