International Business Machines Corp. (NYSE:IBM) is closing a significant research division in China, affecting more than 1,000 employees, as part of a broader shift in strategy.
Local media, including Yicai, reported that the company is shutting down two business lines focused on research and development (R&D) and testing.
Going forward, IBM will prioritize serving private enterprises and select multinational companies operating within China.
This move aligns IBM with other major US corporations scaling back their operations in China, driven by economic downturns, heightened regulatory scrutiny, and a growing preference for local technology solutions.
Companies like Morgan Stanley have also begun relocating some of their operations abroad, while foreign investment in China has slowed due to concerns about Beijing's favoritism towards domestic firms.
According to the Wall Street Journal, IBM plans to relocate its Chinese R&D operations to other global offices, including Bangalore, India.
This decision was communicated in a briefing led by Jack Hergenrother, an IBM vice president.
The company has not yet responded to requests for comment on the matter.