AI Integration Woes, Non-Profitability, Massive Layoffs Still Hounding IBM Watson


One of IBM'S offices located in Amsterdam, Netherlands. / Photo by: Mark Ahsmann via Wikimedia Commons


Healthcare is one of many fields where artificial intelligence can be applied, and veteran tech company, IBM, wants to part of the industry. The company still insists on healthcare with IBM Watson, despite the major layoffs and difficulties in integration.

In the recent spate of layoffs in IBM, three acquired companies – Explorys, Phytel, and Truven – have been affected. The three companies have been acquired in order to fuel the AI research and development of IBM Watson. 

IBM Watson is an AI platform designed for business. It is a computer system with the capacity to answer questions using natural language. The AI system was made public in 2011 in the game show Jeopardy! and demonstrated its processing skills to deal with the show’s game mechanics.

Two years after its public appearance, IBM applied the AI in healthcare to help doctors and patients with electronic health records. Initially, the system was supposed to work in cancer treatment centers where it would scan medical journals and patient records to assist doctors with the best treatment plans. However, three years later, an investigation published in Stat alleged that a part of the system -- Watson Oncology -- did not meet the expectations.

According to two engineers who worked at Phytel before it was acquired in 2015, a department at IBM responsible for making products that sell the company products to customers was to blame for the layoffs. This was due to the company’s goal to develop a fancy product that had the combined features of Explorys and Phytel. But the managers who wanted that did not have a clear idea of the product itself, leaving the project to proceed without a solid roadmap.

“Phytel was a really good company, it was really strong. Many people who got laid off are disappointed because they helped build this company and they really thought IBM would take it to the next level — not destroy it within three years,” said one of the two engineers.

Some analysts already expressed their concern on the investment and profitability of IBM Watson. In a report from Jefferies LLC, the division of the company received a huge amount of investment and it remains non-profitable. The potential problem seen by observers is the company’s lack of useful products for healthcare providers and an AI system that is difficult to integrate with existing data.