IBM will cut roles this quarter, the company said on Tuesday, potentially impacting thousands of employees while it shifts focus towards its high-margin software segment, as Wall Street hones in on the company's ability to benefit from AI-linked cloud demand.
"We routinely review our workforce ... and at times rebalance accordingly," the company said in a statement. "In the fourth quarter we are executing an action that will impact a low single-digit percentage of our global workforce."
Under CEO Arvind Krishna, IBM has doubled down on software as it looks to tap into increased spending on cloud services through its "Red Hat" division, as businesses integrate AI technology.
However, IBM last month recorded a slowdown in growth in the key cloud software segment, raising alarm bells among investors betting heavily on Big Blue's ability to benefit more from booming cloud services demand.
Its shares, which have risen over 35% this year, were down close to 2% on Tuesday.
IBM employed about 270,000 workers as of the end of 2024.
Some US workers may be affected by the job reductions, but employment in the country is anticipated to remain roughly the same year over year, IBM said.
Bloomberg News first reported details about the layoffs earlier on Tuesday.
