IBM has taken a bold step toward workforce reduction through what is being described as a “soft layoff” strategy for its Finance & Operations business unit. Instead of the typical, formal layoffs, the company has begun mandating employees to relocate closer to two designated hubs in Raleigh, North Carolina, or Poughkeepsie, New York, or face severance packages.

AI-Driven Downsizing: The Future of IBM’s Workforce

The company is positioning AI as a significant force in reducing the size of its workforce. IBM plans to replace certain job roles within Finance & Operations with AI systems while focusing on consulting, where executives believe the company can generate more revenue. This shift is part of a broader trend where automation, particularly in AI, is seen as the future, potentially leading to job cuts in various non-strategic roles. The severance packages offered to employees affected by the relocation mandate range from three to six months, depending on tenure.

A Stealthy Approach to Workforce Reductions

The “soft layoff” strategy appears to be a calculated move to avoid public backlash and legal scrutiny over job cuts. The return-to-office (RTO) mandate, which requires employees to report to the office at least three times per week, is being enforced through constant reminders and direct intervention from management. This move is expected to push out employees who are unwilling or unable to comply, effectively reducing headcount without the company having to formally announce layoffs.

Ongoing Workforce Rebalancing: The IBM of Tomorrow

This shift in focus is part of IBM’s larger effort to “rebalance” its workforce. While some positions will be replaced by automation, the company is still hiring in high-demand fields such as AI, machine learning, and data science. This approach signals a future where IBM’s operations will increasingly rely on AI technologies, with Watsonx taking center stage in this transformation.

For more details on IBM’s ongoing workforce restructuring, read the full article here.