IBM and AI: A Spur to Other Ageing Companies?

March 27, 2024

This essay is the work of a dumb dinobaby. No smart software required.

I love IBM. Well, I used to. Years ago I had three IBM PC 704 servers. Each was equipped with its expansion SCSI storage device. My love disappeared as we worked daily to keep the estimable ServeRAID softwware in tip top shape. For those unfamiliar with the thrill of ServeRAID, “tip top” means preventing the outstanding code from trashing data.

IBM is a winner. Thanks, MSFT Copilot. How are those server vulnerabilities today?

I was, therefore, not surprised to read “IBM Stock Nears an All-Time High—And It May Have Something to Do with its CEO Replacing As Many Workers with AI As Possible.” Instead of creating the first and best example of dinobaby substitution, Big Blue is now using smart software to reduce headcount. The write up says:

[IBM] used AI to reduce the number of employees working on relatively manual HR-related work to about 50 from 700 previously, which allowed them to focus on other things, he [Big Dog at IBM] wrote in an April commentary piece for Fortune. And in its January fourth quarter earnings, the company said it would cut costs in 2024 by $3 billion, up from $2 billion previously, in part by laying off thousands of workers—some of which it later chalked up to AI influence.

Is this development important? Yep. Here are the reasons:

Despite its interesting track record in smart software, IBM has figured out it can add sizzle to the ageing giant by using smart software to reduce costs. Forget that cancer curing stuff. Go with straight humanoid replacement.
The company has significant influence. Some Gen Y and Gen Z wizards don’t think about IBM. That’s fine, but banks, government agencies, Fortune 1000 firms, and family fund management firms do. What IBM does influences these bright entities’ thinking.
The targeted workers are what one might call “expendable.” That’s a great way to motivate some of Big Blue’s war horses.

Net net: The future of AI is coming into focus for some outfits who may have a touch of arthritis.

Stephen E Arnold, March 27, 2024

Written by Stephen E. Arnold · Filed Under AI, Financial, IBM Watson, News

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Stephen E. Arnold monitors search, content processing, text mining and related topics from his high-tech nerve center in rural Kentucky. He tries to winnow the goose feathers from the giblets. He works with colleagues worldwide to make this Web log useful to those who want to go "beyond search". Contact him at sa [at] arnoldit.com. His Web site with additional information about search is arnoldit.com.