In 2023, IBM laid off around 8000 individuals, mostly from its human resources division tasked to perform support functions. This was not due to financial troubles. The American multinational technology company was implementing a strategic move to automate routine administrative tasks by incorporating artificial intelligence into its value chain.
Automation of HR Processes
The company introduced AskHR in 2024. This is a proprietary artificial intelligence system and a specific example of a conversational AI agent that automates more than 80 common HR processes. These include the management of payroll, handling of leave requests, processing employee documentation, and responding to common HR queries.
AskHR automated 94 percent of repetitive tasks. This resulted in a productivity boost worth more than USD 3.5 billion. Its introduction was aligned with trends at other tech companies like Google and Spotify which have leveraged AI to introduce efficiencies in support roles. AskHR rendered some HR professionals in support functions redundant.
Unexpected Workforce Growth
The overall headcount of IBM increased after the 2023 downsizing. This surprised top executives like Arvind Krishna, chief executive officer, who told The Wall Street Journal that the cost savings and productivity gains from artificial intelligence and automation allowed the company to invest more in roles requiring human creativity and interaction.
Hence, instead of maintaining a reduced workforce, the company hired new employees in various areas. These include software engineering and sales and marketing. These positions are considered less automatable because they generally require human discretion and discernment, inventiveness and creativeness, and communication and relational skills.
Redefining the Labor Market
The expanding applications of AI and its growing adoption in organizations have raised concerns over sweeping disruptions in the labor force and labor market. Some fear that the technology would result in unprecedented unemployment rates in both white and blue collar spaces with automation by artificial intelligence rendering certain jobs obsolete.
However, based on the experience of IBM, artificial intelligence removes low-skill and repetitive occupations but simultaneously creates demand for workers with technical, strategic, and relational or intrapersonal skills. There are occupations that cannot be automated. This is why it is important to invest in building competencies relevant to these jobs.
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