IBM Shuts Down Its R&D Unit In China, Lays Off 1,000 Workers

International Business Machines Corp. (IBM) is shutting down a key research division in China, a move affecting more than 1,000 employees, local media including Yicai reported, in the latest pullback by a U.S. company from the world’s No. 2 economy, Edwin Chan reported for Bloomberg News.

IBM joins a growing list of companies scaling back their ambitions for China as an economic downturn, heightened regulatory scrutiny, and a drive to replace foreign technology dampen sentiment. I Photo: Cory Denton Wikimedia Commons

The company is shuttering two business lines that specialize in research & development and testing, Yicai reported, citing an IBM statement. The company will instead focus on serving private enterprises and select multinationals operating in China going forward, Yicai added.

IBM joins a growing list of companies scaling back their ambitions for China as an economic downturn, heightened regulatory scrutiny, and a drive to replace foreign technology dampen sentiment.

Wall Street names such as Morgan Stanley have shifted some operations abroad, while foreign investment has slowed partly due to concerns that Beijing is favoring local players.

IBM is the latest multinational tech giant to shed jobs in China, as an intensified Sino-U.S. rivalry forces global businesses to adjust their operations on the mainland.

Sweeping job cuts this year have affected China-based workers in companies from Swedish telecommunications equipment manufacturer Ericsson and electric vehicle maker Tesla to e-commerce behemoth Amazon.com and chip company Intel, the South China Morning Post (SCMP) also reported.