IBM layoffs to affect thousands despite 35% rise in share price this year

IBM is preparing to cut thousands of jobs as part of a global restructuring to accelerate its pivot towards software and artificial intelligence-driven services, Bloomberg News reported on Tuesday.

The company confirmed that layoffs will take place in the fourth quarter, affecting a “low single-digit percentage” of its roughly 270,000 employees worldwide. “We routinely review our workforce … and at times rebalance accordingly,” IBM said in a statement cited by several media outlets.

The latest reductions come as Chief Executive Arvind Krishna intensifies IBM’s shift towards its higher-margin software operations, particularly its Red Hat cloud platform. The company is betting that expanding demand for AI-linked cloud services will offset slower growth in its legacy consulting and infrastructure businesses.

Despite strong gains in its share price this year—up more than 35%—investor confidence has been tempered by a recent slowdown in IBM’s cloud software division, a critical growth engine. Last month, the company reported weaker-than-expected sales in that segment, raising concerns about its ability to sustain momentum in a fiercely competitive market dominated by Microsoft and Amazon Web Services.

While some U.S. employees are expected to be impacted, IBM said its overall workforce in the country will remain broadly unchanged compared to last year.

The restructuring underscores a broader trend among global tech companies realigning operations to capture AI-driven growth. Analysts say the challenge for IBM will be balancing near-term cost cuts with long-term investment in software innovation and partnerships.