We present a computational study of the electronic structure and lattice dynamics of IrTe2 that sheds light on the debated mechanism of the temperature-induced phase transitions of this material. At ambient temperature, IrTe2 adopts a hexagonal crystal structure typical of metal chalcogenides. Upon cooling, some Ir-Ir distances shorten, thus inducing lattice modulations. We demonstrate that this is due to the formation of multicenter bonds involving both Ir and Te atoms. We show how the formation of these bonds is energetically favorable but lowers the vibrational entropy; therefore, they are destabilized by temperature. The obtained model is exploited to rationalize the effect of Se doping and other experimental results from the literature.