IBM has announced that it will suspend hiring in its back-office operations due to the efficiency gains the company is experiencing from the use of artificial intelligence.
IBM CEO Arvind Krishna recently revealed in an interview with Bloomberg that the company believes AI could replace up to 30% of the company’s back-office jobs over the next few years. This means about 7,800 roles that AI and automation could replace.
According to Krishna, back-office functions such as human resources will be the most affected. “It is easy to imagine that 30% of them will be replaced by AI and automation within a five-year period,” Krishna stated. The CEO explained that enterprise software often aims to streamline fixed tasks in back-office operations, making using AI for such tasks increasingly common.
Krishna predicts that routine tasks, such as issuing employee confirmations and moving people between departments, will be fully automated, while some HR functions, such as employee composition and productivity assessments, will remain in place for the next decade.
IBM announced plans earlier this year to lay off approximately 3,900 employees. Despite this, IBM is still hiring employees for software development and customer-facing roles. Krishna revealed that IBM hired about 7,000 workers in the first quarter of this year.
The decision to suspend hiring in back-office operations comes as IBM seeks to maximize the efficiency gains from AI and automation. As the technology continues to advance and become more sophisticated, it is expected that more companies will follow IBM’s lead and leverage AI to automate routine tasks in order to drive efficiency and reduce costs.
The use of AI and automation has already disrupted various industries, and it is expected to have an even greater impact in the coming years. A recent report from Goldman Sachs says the use of generative AI and services based on it could result in up to 300 million people worldwide losing their jobs.
While it may lead to the replacement of certain jobs, it also presents opportunities for new roles and skill sets. Companies like IBM will need to invest in reskilling and upskilling their people as they continue to evolve in order for them to flourish in a quickly changing employment environment.