IBM Watson Health Layoffs Suggests AI Strategy Isn’t Working

IBM Watson Health is apparently making massive cuts to its staff, in a move suggesting that its healthcare AI isn’t working.

Watson Health leaders have argued that AI (which Watson Health leaders call “cognitive computing”) as the solution to many of the healthcare industry’s problems. IBM pitched Watson technology as a revolutionary tool which could get to the root of difficult medical problems.

Over time, however, it’s begun to look like this wasn’t going to happen, at least for the present. Among other high-profile goofs, IBM Watson has struggled with applying the supercomputing tech to oncology, which was one of its main goals.

Now IBM Watson Health has slashed up to 70% of its staff, according to sources speaking to The Register. The site reports that most of the layoffs are cutting staff within companies IBM has brought in an effort to build out its healthcare credentials. These include medical data company Truven, acquired in 2016 for $2.6 billion, medical imaging firm Merge, bought in 2015 for $1 billion and healthcare management firm Phytel, the site reports.

The cuts reflect a major strategic shift for Watson Health, which was one of IBM’s flagship divisions until recently. Having invested heavily in businesses that might have helped it dominate the health IT world, it now appears to be rethinking it’s all in approach.

That being said, no one has suggested that IBM Watson Health will disappear in a poof of smoke. IBM corporate leaders seem dedicated to an AI future. However, if this report is correct, Watson Health is being reorganized completely. Not too much of a surprise since given how hyped it was, it would have been almost impossible for it to live up to the hype.

To me, this suggests that rolling out healthcare AI tools might call for a completely different business model. Rather than applying brute force supercomputing tools to enterprise healthcare issues, it may be better to build from the ground up.

For example, consider Google’s approach to healthcare AI supercomputing. UK-based DeepMind is building relationships and products from the ground up. Working with the National Health Service DeepMind Health is bringing mobile tools and AI research to hospitals. Its mobile health tools include Streams, a secure mobile phone app which feeds critical medical information to doctors and hospitals.

In my opinion, the future of AI in healthcare will look more like the DeepMind model and less like IBM Watson’s top-down approach. Building out AI-based tools and platforms for physicians and nurses first just makes sense.

About the author

Anne Zieger

Anne Zieger

Anne Zieger is a healthcare journalist who has written about the industry for 30 years. Her work has appeared in all of the leading healthcare industry publications, and she's served as editor in chief of several healthcare B2B sites.


  • No, No, and again NO. This is an implementation issue not a strategy issue. This is spider webbing to all corners instead of starting with a small reachable goal. AI is not a panacea, it is not a end unto itself, it’s not intelligence. As with most new fads, marketing took it and ran it into the ground. We just sell, baby; this is the prevalent mantra of companies regardless of what, if anything, they have to deliver. Think dot com bust, and you’ve got deja vu all over again.

  • I see it as IBM using AI to replace the many humans that were on payroll, so really it is a sign of AI’s great power! Sorry, did not want to offend those that lost their jobs, but I couldn’t pass up on the irony.

  • Hi Barry,

    You’re obviously right that this is an implementation issue first and foremost. Marketing has run ahead of actual product status and ruined good projects countless times. (Ever see the episode of the Dilbert TV series in which the marketing team pushes ahead with promoting Dilbert’s underwater barbecue grill? Hilarious.)

    That being said, do you disagree with me that selling ground-up rather than at an enterprise level might have worked better?


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  • IBM layoffs have a long history. But as much as marketing did obscure the truth about Watson – marketing didn’t hire the flock. And what was the flock doing? Probably acquiring data, integrating data, validating data; you know, all that data is going toward “predictable analyses” while the healthcare world needs definitive and verifiable data to innovate.

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