IBM is tightening its grip on employees in its Finance & Operations division, using a return-to-office (RTO) mandate as part of what sources are calling a “soft layoff.” The company has instructed workers in the U.S. to relocate to one of two hubs—Raleigh, North Carolina, or Poughkeepsie, New York—if they wish to keep their jobs. Employees who cannot comply with this move are offered severance packages, which range from three to six months depending on their tenure.
AI and Outsourcing Replacing Workers in IBM’s Finance & Operations
The company is making it clear that AI will play a key role in replacing workers, especially in Finance & Operations, an area considered a significant cost center. According to sources, IBM plans to keep the headcount low in this division while investing in other sectors like consulting, which generate more revenue. This “soft layoff” tactic helps avoid the public perception of mass layoffs, as employees are quietly encouraged to leave or relocate, rather than face traditional downsizing procedures.
A Change in Workforce Strategy
IBM’s decision to enforce the RTO policy and cut jobs comes as part of the company’s ongoing strategy to reduce costs and refocus its workforce. Executives anticipate that AI will replace thousands of workers over the next few years. The company also plans to hire in areas like AI, machine learning, and data science, signaling a shift in the skills it values.
AI Integration Continues at IBM
Internally, IBM is pushing for greater use of its Watsonx AI service, encouraging employees to develop innovative use cases for AI in the company. This is in line with IBM’s long-term plan to automate as much of its workforce as possible. AI agents are also being tested to replace roles traditionally held by humans in functions like HR.
For more details on IBM’s shift in workforce strategy, you can read the full report from The Register.