IBM is the latest tech giant to swing the axe, announcing this week that it plans to cut potentially thousands of jobs despite beating revenue, profit, and cash flow expectations in its latest results.

Chasing AI-fueled cloud growth, the firm said it is shifting focus to its high-margin software business, a strategy that will mean cutting “a low single-digit percentage of our global workforce”, according to a statement shared with Reuters.

But with IBM having around 270,000 staff at the end of last year, even a 1% cut could mean 2,700 tech pros soon looking for work, a move the company simply said was necessary to ‘rebalance’ its workforce. Merry Christmas indeed.

IBM’s pivot follows a jarring slowdown in its core cloud segment last month, a stumble that rattled investors banking on the firm to capitalise on the booming cloud services market. 

Even with that minor slowdown, the company still said it had ‘accelerated performance’ across all of its segments in its third-quarter results, with revenues up 9% to $16.3 billion (£12.5bn) and an AI business standing at more than $9.5 billion (£7.2bn). 

So revenues are climbing and AI is thriving, but the layoffs keep coming – and not just at IBM. The last week has seen similar patterns emerge at both Salesforce and Facebook, a brutal trend that has seen hundreds of UK tech workers axed over the last year.

According to new accounts from Companies House, Salesforce’s UK division shrank by around 300 in 2024, despite profits skyrocketing by 65% in the latest financial year, surging from £51.9 million to £85.7 million in the past twelve months.

Earlier this year, the software giant announced plans to cut 1,000 roles, even as it ramped up hiring in sales to support its growing AI division, a push centred on its flagship platform, ‘Agentforce 360’, where uptake remained modest, according to reports. 

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Likewise, figures show that Facebook raked in a record $51.24 billion (£39.3bn) in Q3’25, but still cut over 600 UK jobs in the past year. The layoffs came as Mark Zuckerberg quietly shelved his push to flood the company with AI talent, a strategy that once looked central to its future.

According to the industry tracker Layoffs.fyi, 275 tech firms have axed staff over the last year, with giants like Amazon, Intel, Google, and Microsoft all cutting hundreds of jobs, despite posting consistently strong results and ploughing more and more cash into AI programmes.  

Those bets are being tested now, however, with the CEOs of both Morgan Stanley and Goldman warning of 10% to 15% drawdowns in value for overinflated tech stocks, a fear seemingly justified with shares dropping for chip maker AMD and, maybe more worrying, the Big Short trader Michael Burry betting against the AI boom.