IBM closes R&D operations in China, hundreds of jobs lost
IBM has announced it will be shutting down its research and development operations in China, potentially costing hundreds of employees their jobs.
The closure affects more than 1,000 IBM employees across the country, with most of the affected workers working in R&D and testing labs.
In a statement, IBM said the closure was necessary as the company “adapts its operations to best serve our customers.” (Via WSJ)
Operation Relocation
During a virtual meeting on Monday, IBM CEO Jack Hergenrother updated employees on the situation. He cited increasing competition in China and the decline of IBM’s infrastructure business as reasons for the cuts.
Tom’s Hardware notes that IBM’s R&D operations are spread across several major Chinese cities, including Beijing and Shanghai. These cities are all set to close.
Many of the cut R&D facilities are being relocated to other locations abroad. Employees with knowledge of the matter say some projects are being relocated to Bengaluru, India, and other locations outside of China.
The relocation of the R&D labs will not affect IBM’s services in China. The company says it will continue to support customers in China.
Tensions between the US and China have led many leading technology companies to adjust their operations in China. However, IBM did not mention geopolitical issues in its announcement.
Microsoft has also taken steps to relocate 700-800 employees working 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 seeks to reposition itself in an industry rapidly embracing AI. Earlier this year, the company announced HashiCorp acquired in a $6.4 billion deal to enhance its cloud and AI offerings.
