IBM shuts China R&D, cuts over 1,000 jobs
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The news: IBM is closing most of its research and development operations in China, affecting over 1,000 jobs across multiple cities, including Beijing and Shanghai.
IBM executive Jack Hergenrother briefed staff about the cuts during a virtual meeting on Monday, according to Chinese media outlet Jiemian.
IBM confirmed the reports in a statement to Reuters, saying "these changes will not impact our ability to support clients across the Greater China region."
The context: Over the weekend, IBM's R&D employees in China discovered they were unable to access the company's intranet system, Jiemian reported.
In the call to announce the decision, Hergenrother explained IBM’s infrastructure business in China was contracting amid intense competition, and that the company was relocating R&D efforts to be closer to clients outside of the country.
The move follows a string of US companies pulling back from China amid intensifying geopolitical tensions between Washington and Beijing.
In May, Microsoft moved to relocate hundreds of Chinese employees involved in its cloud and artificial intelligence amid increasingly tight US restrictions on China’s access to sensitive technologies.
The numbers: IBM's decision also follows an almost 20% drop in sales in the Asian nation in 2023.
IBM's Chinese rivals have benefited from government directives favouring domestic tech providers, further eroding IBM's market share.
The sources: The Wall Street Journal , The Financial Times , South China Morning Post
