XMPP does not inherently support end-to-end encryption. He was probably referring to the transport security, from client to server. This is achieved by securing the connection with SSL/TLS. Most often, IRC does not even support that, although some IRC networks also allow clients to connect with SSL/TLS.

This transport security from your client to the server only secures the first hop. It does not prevent eavesdropping on server-to-server connections, or on the connection of the receiving user if they do not also use SSL/TLS.