Rise Of The Machines? IBM Eyes Replacing 7,800 'Non-Customer-Facing' Jobs With AI

IT service giant International Business Machines Corp. IBM is banking on technology to tide over the vagaries of an inclement economic environment.

What Happened: IBM plans to pause or slow down hiring for back-office roles like human resources, which could potentially be replaced by AI and automation, CEO Arvind Krishna told Bloomberg. 

The company expects up to 7,800 non-customer-facing positions, or 30% of the total non-customer-facing jobs, to be replaced over five years, while some positions may not be replaced after attrition. 

Krishna also noted that certain HR functions would continue to be performed by humans over the next decade, while mundane tasks such as providing employment verification letters or moving employees between departments could be wholly automated.

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Why It's Important: Krishna’s comments come amidst an economic recession that has impacted the revenue of many companies, causing numerous tech firms to scale back investments in unprofitable ventures and lay off employees. The aim is to maintain profitability despite declining revenue.

IBM on its part announced earlier this year plans to eliminate 5,000 positions. The tech company's workforce currently totals 260,000.

It's easier to find talent now than a year ago and IBM would continue to add people for software development and customer-facing roles, Krishna reportedly said.

The development also underlines the importance of AI technology, which has taken the world by storm following the popularity of OpenAI's GPT large language model and ChatGPT, the chatbot powered by the technology.

Microsoft Corp. MSFT earlier this year expanded its partnership with OpenAI by investing $10 billion. This has enabled the software giant to integrate GPT into its Bing search engine and cloud services. Detractors, however, have pointed out the perils of the technology if its development is left unhindered.

IBM closed Monday’s session down 0.25% at $126.09, according to Benzinga Pro data.

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