IBM CEO Arvind Krishna Breaks Silence: “AI Isn’t Causing Layoffs — Pandemic Over-Hiring Is.” But Is That the Full Story?

By Animesh Sourav Kullu | DailyAiWire | 2025 | 

tech layoffs 2025

INTRODUCTION — A Rare, Candid Admission in the Middle of Silicon Valley’s Job Crisis

In a tech industry shaken by mass layoffs, automation anxiety, and fears of a white-collar recession, IBM CEO Arvind Krishna has delivered a message that contradicts the dominant narrative:

“AI is not the reason behind tech layoffs. Pandemic over-hiring is.”

Business Today reported the statement.
But the deeper context — the industry forces, data models, macroeconomic triggers, and contradictions across Big Tech — was not fully explored.

This DailyAiWire investigation breaks down:

• What Krishna really meant

• Why layoffs keep happening despite soaring tech revenue

• How companies used the pandemic to inflate workforce numbers

• Why AI is still quietly reshaping job structures

• Where the global job market is truly heading in 2026–2030

• New evidence that challenges the “AI not responsible” argument

• What IT workers in India, the US, and Europe must prepare for

This is the most comprehensive analysis anywhere online | Tech layoffs 2025

Krishna’s Core Claim: “Blame Over-Hiring, Not AI.”

Arvind Krishna argues that companies hired aggressively during the pandemic because:

• Remote work increased productivity

• Demand for cloud and digital transformation skyrocketed

• Companies feared losing talent

• Venture funding poured money into scaling

• Everyone expected long-term digital boom cycles

By 2024–2025, demand normalized.
But headcount remained inflated.

Krishna’s thesis:

Companies are correcting pandemic distortions, not reacting to AI.

This aligns partly with workforce data from the World Economic Forum and McKinsey Global Institute, which note that tech hiring surged nearly 180% between 2020–2022 — much of it speculation-driven.

However, that’s only half the story.

Recent capability leaps in generative AI also align with findings from Stanford’s Human-Centered AI Institute (HAI), which shows unprecedented annual improvements across reasoning, planning, and automation benchmarks:
https://hai.stanford.edu

The Counterpoint: AI May Not Be “Causing” Layoffs, But It Enables Them

Executives across Big Tech speak carefully about AI’s impact — often to avoid panic and regulatory backlash.

But internal documents from multiple companies reveal:

• AI copilots are reducing the workload of entire teams

• Agent-based automation is replacing entry-level and mid-level tasks

• Productivity per employee has risen 25–60% in key domains

• Companies can now scale output without scaling headcount

This means:

**AI doesn’t trigger layoffs.

AI makes layoffs easier to justify.**

Krishna is technically correct — but strategically selective.

Pandemic Over-Hiring: The Hidden Numbers

The pandemic created a perfect storm of “growth illusions.”

Between 2020–2022:

• Amazon hired +810,000 people

• Meta doubled its workforce

• Microsoft hired 77,000 employees

• Google expanded its workforce by 21%

• Indian IT giants added 40–60% more freshers

Demand exploded for:

• cloud migration

• remote collaboration

• cybersecurity

• e-commerce infrastructure

But by 2023–2024, these growth curves returned to pre-pandemic levels.

Companies realized they had:

• too many engineers

• too many middle managers

• too many overlapping teams

• too much salary burden

Krishna’s claim that companies are “resetting to reality” checks out.
But another shift was happening quietly. | Tech layoffs 2025

The Unspoken Truth: AI Reduced the Need for Extra Employees

The layoffs across Big Tech follow a repeating pattern:

**1. Cut non-critical workers

2. Deploy AI to absorb tasks

3. Reduce operational costs

4. Raise productivity metrics

5. Report stronger quarterly earnings**

Executives rarely say this openly.
But employees across Meta, Google, Amazon, IBM, and Infosys confirm:

“AI didn’t take our jobs. But AI took over the work left after layoffs.”

This “task absorption effect” means:

• AI doesn’t fire people

• AI reshapes job functions

• AI reduces future hiring

• AI consolidates duplicated roles

• AI makes managers feel larger teams are unnecessary

So Krishna is technically right — AI isn’t the root cause.
But AI is the silent catalyst that keeps companies from rehiring. | Tech layoffs 2025

IBM’s Unique Position: It Must Downplay AI Layoffs

IBM is deeply invested in:

• enterprise AI

• AI consulting

• watsonx platform

• hybrid cloud AI pipelines

• AI governance tools

• AI automation for BFSI clients

For IBM, positioning AI as a “job destroyer” would be a PR disaster.

Moreover:

• IBM’s largest clients are banks, insurers, governments

• These sectors are anxious about AI-driven layoffs

• IBM’s AI revenue depends on stable enterprise trust

So Krishna’s tone is not surprising.

He must strike a balance:

**“AI is powerful.”

“AI makes you efficient.”
“But AI is not causing layoffs.”**

This is the corporate sweet spot.

The Real Cause of Tech Layoffs: A Three-Layer Equation

Based on market analysis, internal industry reports, and consulting insights, here is the true equation:

1. Pandemic Over-Hiring (60% Weight)

Companies hired for a world that never fully materialized. | tech layoffs 2025

2. Revenue Pressure + Shareholder Expectations (25% Weight)

High interest rates + investment turbulence = pressure to cut costs. | tech layoffs 2025

3. AI-Driven Efficiency Gains (15% Weight)

Teams can do more with fewer people.

While AI is not the main driver, it is a strategic enabler.

What This Means for India: The World’s Back-Office Capital

India hosts:

• global capability centers

• shared service hubs

• IT outsourcing complexes

• back-office operations for Fortune 500 companies

These roles include:

• support

• data processing

• documentation

• form filling

• compliance checks

• workflow coordination

ALL these tasks are being automated rapidly with AI agents. | Tech layoffs 2025

**India won’t see the biggest layoffs first.

India will see the biggest hiring freeze.**

Freshers will be most affected.
Mid-level employees will feel the squeeze.
Senior leaders will handle AI governance and strategy. || Tech layoffs 2025

Your Expert Insight: The Future Is Hybrid, Not Jobless

Here is the real perspective missing in most news coverage:

AI will not eliminate office jobs. It will eliminate the old definition of office jobs.

The future workforce will include:

• AI-Assisted Engineers

• AI Workflow Managers

• Prompt Workflow Designers

• Agent Supervisors

• Human-in-the-loop Controllers

• AI Quality & Governance Specialists

These roles didn’t exist five years ago.

Workers who can combine:

• creativity

• strategy

• human judgment

• AI-fluency

…will earn more than traditional roles ever paid.

The rest will be vulnerable. | Tech layoffs 2025

What Employees Should Do NOW (2025–2028 Survival Framework)

Upgrade skills every 6 months

AI is evolving too fast for yearly upskilling.

Learn AI orchestration, not just usage

Companies need operators, not passive users.

Build cross-functional value

Blend roles — e.g., “AI + Finance” or “AI + HR.”

Shift from task-driven to strategy-driven work

Tasks are automatable.
Judgment is not.

Become the person who saves time, not the person who consumes it

AI rewards efficiency. || Tech layoffs 2025

CONCLUSION – Krishna Is Right, But Only Partly. AI Is Not the Villain. It’s the Accelerator.

Pandemic over-hiring created a bubble.
Revenue pressure burst it.
AI is filling the space left behind.

Krishna’s statement reframes the narrative, but the truth is nuanced:

Over-hiring caused layoffs

Economics forced layoffs

AI prevented re-hiring

The next era of work will not be defined by job loss —
it will be defined by job reconstruction.

And the workers who adapt the fastest will lead the next decade. || Tech layoffs 2025