According to DCD, IBM is planning to cut thousands of jobs in the fourth quarter of 2025, affecting a “low single-digit percentage” of its global workforce of around 270,000 employees. The company confirmed the restructuring in a November 4 statement, noting they “routinely review our workforce and at times rebalance accordingly.” This comes shortly after IBM reported Q3 2025 revenue of $16.3 billion, up nine percent year-over-year, with software being the largest segment at $7.2 billion. Despite the growth, IBM shares dipped around five percent following the earnings call and haven’t recovered. The cuts are specifically aimed at helping IBM focus on its software business and benefit from AI and cloud growth.
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The software pivot
Here’s the thing – IBM’s been trying to reinvent itself for years, and this feels like another major course correction. They’re basically saying “software is where the money is, and we’re going all in.” But is it really that simple? Their hybrid cloud business, which includes Red Hat, grew 14 percent last quarter but still missed expectations of 16 percent. That’s not exactly the kind of momentum that screams “double down.”
What this means for workers
IBM says they expect US employment to remain roughly the same year-over-year, which suggests the cuts might hit international operations harder. But let’s be real – “low single-digit percentage” of 270,000 could mean anywhere from 2,700 to 8,000 jobs. That’s a lot of people getting reorganization notices right before the holidays. And this isn’t happening in a vacuum – we’ve seen similar workforce “rebalancing” across tech as companies chase AI hype while trying to maintain profitability.
The competitive landscape
IBM’s trying to compete with cloud giants like AWS, Azure, and Google Cloud, but they’re playing a different game. They’re betting big on hybrid solutions and enterprise software, which makes sense given their legacy customer base. The problem? Their recent cloud outage affecting 10 regions – resolved within two hours but following similar issues earlier this year – doesn’t exactly inspire confidence in their infrastructure reliability. When you’re trying to convince businesses to trust you with their digital transformation, uptime matters more than press releases.
Looking ahead
So where does this leave IBM? They’re clearly making a calculated bet that software and AI will drive future growth more than their traditional hardware and services businesses. The timing is interesting – doing this after what looks like decent quarterly numbers suggests they see storm clouds ahead or want to get ahead of market shifts. Either way, thousands of employees are about to pay the price for this strategic pivot. The real question is whether trimming the workforce while chasing software dreams will actually help IBM regain its former glory or just leave them spread thinner in an increasingly competitive market.
