IBM has announced it is shutting down its research and development operations in China, with hundreds of workers set to lose their jobs.
The closure will impact more than 1,000 IBM workers across the country, with most of the employees affected working in R&D and testing labs.
In a statement, IBM said the closure was needed as the business “adapts its operations as needed to best serve our clients.” (Via WSJ)
Operation Relocation
At a virtual meeting on Monday, IBM executive Jack Hergenrother briefed employees on the situation, citing increasing competition in China and the decline in IBM’s infrastructure business as reasons for the cuts.
Tom’s Hardware notes IBM’s R&D operations are located across several major Chinese cities, including Beijing and Shanghai, all of which are apparently set to close.
Many of the cut R&D facilities will be moved to other overseas locations, with briefed employees stating that some projects will be moved to Bengaluru, India, as well as other locations outside of China.
The relocation of R&D labs will not affect IBM’s provision of services inside China, with the company stating that it will still be able to support clients within China.
Tensions between the US and China have led to many top technology companies making changes to their operations in the latter country, however IBM did not mention any geopolitical issues in its announcement.
Microsoft has also made moves to relocate between 700-800 employees based in China to other countries, including the US, Australia, New Zealand and Ireland as part of US sanctions on China’s access to advanced AI processing chips.
The move is the latest in a series of major announcements from IBM as it looks to re-position itself in an industry rapidly embracing AI. Earlier this year, the company acquired HashiCorp in a $6.4 billion deal to enhance its cloud and AI offering.
