After Massive Layoffs, IBM Spends £8.9 Billion to Acquire Confluent - Here's Why

IBM has just announced a massive acquisition of Confluent for a staggering USD 11 billion, even as the technology giant has recently carried out widespread layoffs.

Now, this decision is highly controversial, as IBM attempts to reconfigure itself for an AI-driven future by shedding the old way of working and building high-value data and cloud capabilities.

AI Replacing Humans at IBM?

Earlier this year, IBM reportedly laid off around 8,000 employees, most of them from its Human Resources department. At the time, the company explained that many back-office functions, such as handling paperwork, processing leave requests, managing payroll, and other routine tasks, are now being handled by AI agents. In fact, IBM said its internal 'AskHR' system now performs roughly 94% of these routine HR duties.

However, this restructure is not limited to HR, as reports indicate that IBM's workforce reductions have been part of a massive reallocation of resources, moving away from lower-margin back-office roles and toward growth areas like software engineering, sales, marketing, and other functions that demand strategic thinking and creativity.

In commenting on the layoffs, IBM's leadership included the cuts as part of a massive transformation. Furthermore, the company pointed out that while some divisions shrink, it continues to invest heavily in areas that are more aligned with future growth, especially artificial intelligence and cloud computing. This redistribution of talent and capital seems to be the new mantra for aligning IBM's workforce and resources with its evolving priorities.

Nonetheless, the layoffs clearly reveal a more brutal reality for many employees, especially those in eliminated roles. This significant change towards automation and AI means fewer opportunities and perhaps a sense of uncertainty. However, for IBM as a business, this appears to be a calculated rebalancing in preparation for the emerging demands of the AI era underway.

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Acquisition of Confluent

Just as IBM is changing its workforce, it has also begun a massive expansion of its technological footprint. On 8 December 2025, IBM confirmed in its press release that it will acquire Confluent, the data streaming platform known for real-time data and event processing, for USD 11 billion in cash. In British pounds, at a rough conversion rate of 0.81, that amounts to about £8.9 billion.

Moreover, under the deal, Confluent shareholders will receive USD 31 per share in cash. So, the acquisition becomes IBM's most significant purchase in years and comes at a contentious time, as enterprises across the world race to build infrastructure capable of delivering real-time data for AI applications.

Why Confluent? The answer lies in the platform's main strength: it enables organisations to connect, process, and govern data streams in real time, a capability that is essential for generative and agentic AI systems that require vast, continuously updated data inputs.

So, by folding Confluent into its hybrid cloud and AI ecosystem alongside services and products such as automation, data analytics and consulting, IBM believes it can offer customers a unified 'smart data platform'. CEO Arvind Krishna described the combined company as able to help enterprises 'deploy generative and agentic AI better and faster' by ensuring a silky-smooth data flow between clouds, data centres, applications and APIs.

Financially speaking, IBM expects the acquisition to be immediately beneficial, as the deal is projected to increase its adjusted EBITDA in the first full year after closing and improve free cash flow in the second.

So, by integrating Confluent, IBM would be well-positioned to serve organisations seeking scalable, secure infrastructure for AI workloads, real-time analytics, event-driven architectures, and cloud-native deployments. Furthermore, given that Confluent already serves over 6,500 customers, including more than 40% of Fortune 500 companies, the acquisition immediately boosts IBM's reach and relevance in the enterprise AI market.