IBM CEO Arvind Krishna pins mass layoffs on Covid-era over-hiring and not AI; here’s why

IBM CEO Arvind Krishna

IBM CEO Arvind Krishna has said that the mass layoffs taking place across global technology companies are not a result of artificial intelligence (AI) but a correction following the significant hiring surge seen during the Covid years. He explained that companies expanded their workforce rapidly between 2020 and 2023, and the present cuts reflect an adjustment to stabilise operations after that period of accelerated growth.

Covid-era hiring spike led to workforce imbalance

Krishna said that many technology companies added large numbers of employees during the pandemic as digital services and cloud adoption increased. According to him, several organisations expanded their employee base by 30 to 100 percent in just a few years. This pace of hiring, he said, went beyond long-term operational needs and created an imbalance once demand normalised.

He described the trend as a natural cycle in which companies first scale beyond required levels and later reduce headcount to reach sustainable staffing. Krishna also compared it to an underdamped system in engineering terms, where expansion overshoots before returning to equilibrium.

AI is not driving current layoffs

Krishna said AI is not responsible for the widespread layoffs seen recently. While he acknowledged that automation will change certain roles and lead to limited displacement in specific functions over the next few years, he clarified that the majority of job cuts happening now are tied to earlier hiring decisions rather than technology replacing jobs.

He added that fears around AI-driven mass unemployment do not align with current industry realities, as most companies are revisiting the hiring sprees of the pandemic years rather than reducing staff due to automation.

AI’s long-term impact may shift roles

Krishna said AI will have an impact on the workforce but in a gradual and concentrated manner. He estimated that up to 10 percent of jobs in the US may shift due to automation in the next few years, primarily in repetitive or process-driven areas. However, he said companies will continue hiring for new roles as productivity increases and new business requirements emerge.

Despite industry-wide job cuts, IBM plans to continue hiring, especially for fresh graduates. Krishna said the company will add talent in areas where AI and cloud adoption are driving new opportunities, while maintaining a stable workforce aligned with long-term demand.