IBM (IBM, Financials) handed off repetitive HR work to AIand used the savings to hire more people where it counts: engineers, marketers, and sales staff.

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CEO Arvind Krishna said IBM's AI tool, AskHR, now takes care of the small stuffapproving vacations, answering pay questionsthings that don't need a human touch.

And while hundreds of HR jobs were phased out, IBM didn't shrink. It actually grew to 270,300 employees in 2024. The new hires? People who solve problems, think creatively, and work with customersstuff machines still can't do well.

Another AI tool, AskIT, helped lighten the load on IBM's tech support team by 70%. Add it all up, and IBM says AI helped boost productivity by $3.5 billion over two years.

At its Think conference, IBM showed off its next act: generative AI tools that let customers build their own AI agents in under five minutes. That part of the business is already pulling in $6 billion a year.

IBM isn't alone. Klarna, Salesforce, and others are leaning on AI toobut the key difference here is how IBM is reinvesting in people, not just replacing them.

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This article first appeared on GuruFocus.

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