Strangely I think they would have saved face better if they said "we are letting 7800 people go due to poor business practices" rather than some BS line about LLMs being ready to replace humans.

Nah, you have to look at this from the perspective of IBM's target customers. A bunch of Fortune 500 execs who can barely use a computer are going to see this and say "That's brilliant! Can you do the same thing for us?"

IBM hasn't been making logical decissions recently (past decade or so) and this fits the pattern. It's actually rather embarassing they even mention the term AI considering they've been playing with it for a while and nothing came out of it. They should stick to low quality consulting and call it a day.

Also, their competitors are better at AI, they basically use it to say they fire people because of their competitors.

Poor middle management, those should be the majority of the people to let go.

That's literally every tech company. Middle managers, product owners, project managers, etc can all go.

On what assumption (or fact, which I doubt) do you base that?

Source?