IBM’s ambitious push to replace thousands of employees with artificial intelligence has taken an unexpected turn. After laying off 8,000 workers, primarily in human resources, the company has been forced to rehire many of them due to AI’s limitations.
The company introduced AskHR, an AI-powered system designed to automate routine HR tasks such as payroll processing, vacation approvals, and employee documentation. The platform successfully handled 94 percent of these functions, generating an estimated $3.5 billion in productivity gains. However, IBM quickly realized that automation alone could not replace human judgment, creativity, and problem-solving.
IBM CEO Arvind Krishna admitted that despite aggressive AI adoption, total employment at the company has actually increased. The company has shifted its hiring focus toward software engineers, marketers, and sales professionals—roles that require human interaction and strategic thinking.
The failure of full automation highlights the limits of AI in the workplace. While machines excel at repetitive tasks, they struggle with complex decision-making and nuanced problem-solving. IBM’s experience serves as a cautionary tale for companies rushing to replace workers with AI without fully understanding its constraints.
Sources:
https://tech-ish.com/2025/05/22/ibm-ai-gamble-backfires-forced-to-rehire-after-8000-job-cuts/
https://www.konsyse.com/articles/ibm-fired-8000-individuals-due-to-ai-then-hired-as-many-due-to-ai/