IBM shuts down its R&D department in China as part of a broader business strategy shift and ongoing widespread tech layoffs
After the recent disclosure that IBM had restricted intranet access for employees in its Chinese research and development and testing departments, the company officially announced the closure of its research and development operations on the morning of August 26.
(Yicai) Aug. 26 – US tech giant International Business Machines (IBM) plans to disband its research and development division in China, affecting over 1,000 employees. The IBM China Development Lab and IBM China System Lab will be impacted, as the New York-based company informed Yicai today, noting that all affected staff will receive compensation.
Once IBM’s most significant regional market outside the United States, China is witnessing a major shift with the closure of its R&D division, marking a pivotal moment in the company’s 40-year presence in the country. In January 2021, IBM already closed its China Research Lab, which was primarily focused on Watson, a computer system launched in 2011 that answers questions in natural language.
“I’ve served IBM for several decades, and it’s unfortunate to see the shutdown of its Chinese R&D division,” commented one IBM employee.
“The closure will mainly affect testers, who aren’t strictly involved in research and development,” a former employee of multiple US software companies told Yicai. “IBM actually relocated its entire R&D division to the US years ago.”
IBM China emphasized that the company will continue to adjust its operations as needed, assuring that these changes will not impact their ability to support customers in China. However, the company is now facing a significant risk of permanent closure in China. The shuttering of its R&D operations could weaken IBM’s ability to innovate locally and compete effectively in the rapidly evolving Chinese tech market, especially with the rise of domestic companies that are increasingly dominating the space.
This year marks the 40th anniversary of IBM’s entry into the Chinese market. Speaking at an AI-themed forum held by IBM China on Aug. 22, Hans Dekkers, General Manager for IBM Asia Pacific, expressed hope that IBM will continue to thrive in China for the next 40 years and beyond.
During the same forum, IBM China’s Chairman and General Manager Chen Xudong shared his optimism about the growth of IBM’s AI business in the Chinese market in an interview with Yicai. However, with the R&D closure and ongoing challenges, IBM’s long-term presence in China remains uncertain.
