IBM will cut thousands of roles this quarter while it continues to shift focus to higher-growth software and services, Bloomberg News reported on Tuesday.

“We routinely review our workforce through this lens and at times rebalance accordingly,” Bloomberg quoted a company spokesperson saying. “In the fourth quarter we are executing an action that will impact a low single-digit percentage of our global workforce.”

Under chief executive Arvind Krishna, IBM has honed in on software as it looks to benefit on increased spending on cloud services through its “Red Hat” division, as businesses integrate artificial intelligence technology.

However, IBM last month recorded a slowdown in growth in the key cloud software segment, raising alarm bells among investors betting heavily on Big Blue’s ability to benefit more from booming cloud services demand.

Its shares, which have risen over 35% this year, were down close to 2% on Tuesday.

IBM employed about 270,000 workers as of the end of 2024.

Some U.S. workers may be affected by the job reductions, but employment in the country is anticipated to remain roughly the same year over year, the report said, citing an IBM spokesperson.

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(Reporting by Arsheeya Bajwa; Editing by Alan Barona)