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Will AI Replace Jobs at IBM (NYSE: IBM)?
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Will AI Replace Jobs at IBM (NYSE: IBM)?

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IBM CEO Arvind Krishna expects AI to replace jobs at the company. IBM plans to reduce non-customer-facing roles like human resources.

Many fear that the advancements in AI (Artificial Intelligence) will threaten jobs, bringing economic hardships. This may come true for IBM (NYSE: IBM) employees. IBM’s CEO, Arvind Krishna, told Bloomberg that the company would not hire people for the roles that it thinks could be replaced with AI in the coming years.

Specifically, Krishna added that IBM would slow or suspend hiring for back-office functions or non-customer-facing roles like human resources. IBM has about 26K non-customer-facing roles, and AI and automation could replace 30%, or about 7.8K, of these roles over the next five years, Krishna highlighted.  

It’s noteworthy that IBM acquired three companies in Q1 to complement its innovations and extend its capabilities in hybrid cloud and AI. 

During the Q1 conference call, Krishna said that AI could boost productivity and reduce costs for enterprises. He highlighted that AI could turn workflows into simpler automated processes, driving productivity. 

IBM’s CFO, James Kavanaugh, said during the Q1 call that the company is deploying AI at scale in areas like HR and talent, finance, and end-to-end processes. These steps have accelerated its speed of completing a task and freed up spending for reinvestment and supporting margin expansion.

While IBM focuses on driving productivity and margins, let’s check what analysts recommend for the stock. 

Is IBM a Buy, Sell, or Hold?

IBM stock is down over 9% year-to-date. Meanwhile, analysts maintain a cautiously optimistic outlook for IBM. It has received four Buy and four Hold recommendations for a Moderate Buy consensus rating. 

Analysts’ average price target of $147.71 implies 17.15% upside potential. 

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