Key Points:
- IBM layoffs will affect a low single-digit percentage of its 270,000-strong global workforce in Q4 2025, with thousands of jobs expected to be cut.
- The layoffs are part of a strategic pivot toward high-growth software, cloud services, and AI consulting, especially through its Red Hat division.
- Despite the shift, IBM reported slowing growth in its cloud software segment last month, raising concerns among investors about its ability to capitalize on booming AI demand.
IBM layoffs are set to impact thousands of employees in the fourth quarter of 2025 as part of its strategy to focus more on software development and service operations. The company confirmed that the move will affect a small percentage of its global workforce, with some US-based roles expected to be impacted.
According to a Bloomberg report, IBM said it “routinely reviews” its workforce to align staffing with business goals and technological priorities. “In the fourth quarter, we are executing an action that will impact a low single-digit percentage of our global workforce,” a company spokesperson stated.
Strategic Shift Toward Software and Cloud Growth
The layoffs come as IBM intensifies its focus on expanding software and cloud services, a key segment of its transformation strategy. The company has faced slower growth in recent quarters, particularly in its hybrid cloud business, which had been one of its fastest-growing areas in previous years.
Reuters reported that IBM saw a deceleration in its cloud software revenue last month. While IBM shares have risen more than 35% in 2025, they fell nearly 2% following the IBM layoffs announcement. Analysts believe the workforce realignment is part of a broader effort to drive efficiency and reallocate resources toward emerging technologies, including artificial intelligence and enterprise cloud integration.
IBM employed approximately 270,000 people as of the end of 2024. Although some US workers are expected to be affected, the company indicated that overall employment levels in the country will remain largely unchanged year over year.
Global Tech Industry Undergoing Major Workforce Realignments
The IBM layoffs reflect a broader trend of restructuring across the global technology sector. Companies including Amazon, Microsoft, and Tata Consultancy Services (TCS) have all announced workforce reductions this year as they shift resources toward AI-driven initiatives and digital infrastructure.
Data from Layoffs.fyi, a platform that tracks global technology job cuts, shows that over 112,000 tech workers have been laid off across more than 200 companies in 2025 alone.
Amazon recently revealed plans to cut approximately 14,000 corporate roles worldwide. The e-commerce giant said it will offer affected employees 90 days to explore internal job opportunities, with recruiting teams prioritising displaced staff.
Microsoft has also announced more than 15,000 job cuts this year, although CEO Satya Nadella has said the company intends to increase hiring in the future through a more targeted and strategic approach.
Meanwhile, TCS, India’s largest IT services provider, reported a workforce reduction of nearly 19,800 employees in the second quarter of fiscal year 2025–26, bringing its total headcount to around 593,000.
IBM’s Future Growth Priorities
The IBM layoffs align with the company’s long-term goal of focusing on high-margin business segments such as AI, hybrid cloud, and consulting services. The company has been steadily moving away from its traditional hardware operations to strengthen its software portfolio and cloud computing capabilities.
Industry experts say these changes reflect a broader shift in how technology firms are adapting to evolving business demands. As automation, AI integration, and digital transformation reshape the IT landscape, companies are realigning teams to meet new market needs.
IBM has been investing heavily in its Red Hat software division, cloud computing infrastructure, and AI tools that complement enterprise clients’ digital ecosystems. The company aims to boost profitability by focusing on scalable services rather than legacy operations.
While workforce restructuring often brings short-term challenges, IBM’s leadership believes that a leaner structure will help accelerate innovation and enhance competitiveness in the global tech market.
For business owners and entrepreneurs, the IBM layoffs highlight a broader strategic shift signals the ongoing reorientation of the tech industry toward software-driven growth models and data-centric innovation.
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