IBM Is Firing and Hiring the Same Number of People. Here's Why.
The Paradox
IBM laid off 8,000 people in May 2025.
Their CEO said: "Our total employment has actually gone up."
Both statements are true.
If this confuses you, you're not alone. But once you see the pattern, you'll spot it everywhere.
The Three-Wave Strategy
IBM isn't doing random layoffs. They're executing a coordinated transformation in three deliberate waves:
Wave 1: March-April 2025
The Geography Shift
- Cut: ~9,000 US jobs (Cloud infrastructure, consulting, sales)
- Hired: ~8,200 jobs in India (same roles, different location)
- Result: -$150M in labor costs, same work output
Translation: "We're moving expensive US roles to India."
Wave 2: May 2025
The AI Replacement
- Cut: ~8,000 HR positions
- Reason: AI system called "AskHR" handles 94% of routine tasks
- Hired: ~7,500 software engineers and AI developers
- Result: Same headcount, different skills
Translation: "We're replacing administrative roles with software engineers."
Wave 3: November 2025
The Infrastructure Purge
- Cut: 2,700-8,100 people ("low single-digit percentage")
- Target: US Infrastructure (45-50% cuts) and Cloud teams (50%+ cuts)
- Reason: Legacy cloud business delivering "middling results"
Translation: "We're phasing out old tech while betting on AI and software."
The Math That Makes It Make Sense
Here's the before and after:
OLD IBM (Pre-2020)
Hardware Engineers: ████████ (8,000)
Mainframe Specialists: ████████ (8,000)
Consulting: ████████████ (12,000)
HR/Admin: ████████ (8,000)
Software/AI Engineers: ████ (4,000)
Total: 40,000 employees in US
Avg salary: $120K
Labor cost: $4.8B
TARGET IBM (Krishna's Vision)
Hardware Engineers: ██ (2,000)
Mainframe Specialists: ██ (2,000)
Consulting (AI-powered): ██████ (6,000)
HR/Admin: █ (1,000)
Software/AI Engineers: █████████████████ (17,000)
India-based roles: ████████████ (12,000)
Total: 40,000 employees (same size)
Avg salary: $95K (geography mix)
Labor cost: $3.8B (-$1B savings)
Same headcount. $1 billion less. Completely different company.
Why "Workforce Rebalancing" Is Genius (and Brutal)
Companies typically have two options when their business model shifts:
Option 1: The Traditional Pivot
- Lay off 25% of workforce
- Stock drops
- Morale crashes
- Media massacre
- Slow rebuild
Option 2: The IBM Play
- Cut 10,000 old roles
- Hire 9,500 new roles
- Net change: -500 headcount
- Headline: "IBM maintains workforce size"
- Reality: Completely different company
IBM chose Option 2.
It's brilliant because:
- You avoid the "mass layoff" narrative
- You maintain institutional knowledge (some employees stay)
- You keep stock stable (net headcount flat)
- You execute transformation faster (no hiring freeze)
It's brutal because:
- You're telling 10,000 people their skills are obsolete
- You're making them compete for new roles they're not qualified for
- You're doing it during "business as usual" (no crisis to blame)
The Five Rules of IBM's Playbook
Every company executing this strategy follows the same pattern:
Rule 1: Never call it "layoffs"
IBM says: "Workforce rebalancing" Google says: "Simplification" Meta says: "Year of efficiency"
Rule: Corporate speak softens the blow.
Rule 2: Cut in waves, not one big hit
Why: Spread over 9 months = individual news cycles Result: No single catastrophic headline
Rule 3: Always say "low single-digit percentage"
"Low single-digit" could mean:
- 1% = 2,700 people
- 3% = 8,100 people
- 200% difference, same phrase
Rule: Vague numbers sound smaller.
Rule 4: Hire while you fire
Result: CEO can truthfully say "headcount is growing" Reality: Different people, different roles
Rule 5: Move work, don't eliminate it
- US Infrastructure Engineer → India Cloud Specialist
- HR Manager → AI System
- Mainframe Consultant → Software Developer
Rule: Work stays, workers change.
The Real Story: IBM's 113-Year Pattern
IBM was founded in 1911.
For 113 years, they've been reinventing themselves every decade:
- 1950s: Tabulating machines → Mainframe computers
- 1980s: Hardware → Personal computers
- 1990s: Products → IT services and consulting
- 2000s: Consulting → Software and middleware
- 2010s: On-premise → Cloud computing
- 2020s: Cloud → AI and hybrid platforms
Every 10-15 years, IBM fires everyone who worked on the old thing and hires people for the new thing.
Most companies die when their core business becomes obsolete.
IBM just becomes a different company.
The 2025 layoffs aren't a crisis. They're Tuesday.
The Three Questions That Matter
If you work at a tech company (any tech company), ask yourself:
Question 1: Does my role appear in earnings calls?
If your CEO talks about AI every quarter and you work on mainframes... that's your answer.
Question 2: Can my job be done from India for 1/3 the cost?
IBM has 2,840 job openings in India vs. 376 in the US.
If your role is location-independent, it's location-vulnerable.
Question 3: Could AI do 80% of my job in 2 years?
IBM's "AskHR" replaced 94% of HR tasks. Satisfaction went from -35 to +74.
That's not coming. That's here.
What "Employability" Actually Means Now
Job security is dead. Employability is everything.
Job security = Keeping ONE job Employability = Being able to get ANY job
IBM proves you can't count on job security:
- Even at 113-year-old companies
- Even during profitable quarters
- Even when you're doing good work
But you CAN build employability:
The Three Pillars
Pillar 1: Skills in Growth Areas
- Not: What you know
- But: What your industry needs next
- IBM is hiring: AI, cloud-native, software
- IBM is cutting: Legacy infrastructure, mainframe, admin
Pillar 2: Demonstrable Outcomes
- Not: Years of experience
- But: Measurable results
- "10 years in cloud" → Vulnerable
- "Built system handling 10M requests/day" → Valuable
Pillar 3: Location/Automation Resistance
- Can your role be done remotely from India?
- Can AI handle 80% of your tasks?
- If both answers are "yes," you're in the danger zone
You don't need all three. But you need at least two.
The Trend You Can't Unsee
Once you understand IBM's playbook, you'll see it everywhere:
Salesforce (2023):
- Cut 8,000
- Hired 3,300 in AI roles
- CEO: "We're becoming an AI company"
Microsoft (2024):
- Cut 10,000
- Hired 6,000 AI engineers
- Same pattern
Google (2024):
- Cut 12,000
- Hired 8,000 in AI/ML
- Same pattern
Meta (2023-2024):
- Cut 21,000
- Hired 12,000 in AI
- Same pattern
This isn't IBM's strategy. This is THE strategy.
The One Thing That Changes Everything
Here's the uncomfortable truth:
IBM employees getting laid off in 2025:
- Aren't bad at their jobs
- Aren't underperforming
- Aren't expendable
They're just doing jobs that don't exist in IBM's future.
The question isn't: "Am I good enough?"
The question is: "Does my role exist in my company's 2027 strategy?"
If you can't answer that question...
It's time to find out.
The Brutal Bottom Line
IBM's message to the tech industry:
You don't have to shrink to transform.
You can cut 10,000 and hire 9,500.
Same size company. Different DNA.
Stable headcount. Transformed workforce.
This playbook will spread.
Not because companies want to hurt people.
But because it works.
And in capitalism, what works spreads.
What to Do Right Now
If you work in tech:
- Read your company's last 3 earnings calls
- What do they talk about repeatedly?
- Is your role mentioned? Your division?
- Check your company's job postings
- What are they hiring for?
- Where are they hiring?
- How does that compare to your role?
- Ask yourself the uncomfortable question
- If your company could rebuild from scratch today...
- Would they create your position?
If the answer is "no" or "I don't know"...
Start building employability.
Not next quarter.
Now.
The Final Insight
IBM isn't laying off people because of a crisis.
They're laying off people during success.
Revenue: $60B+ and growing Profit: Positive and expanding Stock: Relatively stable
This is what controlled transformation looks like.
And it's harder to see coming than a crisis.
Because when companies are struggling, you expect layoffs.
When companies are thriving and still cutting thousands?
That's when you realize:
The job you're good at today...
Might not exist tomorrow.
Not because you failed.
But because the game changed.
Welcome to the new normal.
Related: See IBM's Complete 2025 Workforce Transformation Timeline for detailed analysis of all three waves, role-by-role breakdowns, and geographic shifts.
Data sources: IBM earnings calls Q1-Q4 2025, The Register investigations, WARN notices, employee reports, analyst estimates.