Sources: abplive.com, PCMag.com
IBM shut down its R&D operations in China, following several other tech companies that scaled back their operations there due to increased competition, declining business, and tensions around US tech firms. The closure will affect more than 1,000 people; IBM plans to hire R&D staff in other locations, like India.
Jack Hergenrother, IBM’s VP of global enterprise systems development, reportedly said that IBM’s infrastructure business could be doing better in recent years. IBM saw its revenue from China fall nearly 20% last year amid ongoing tech industry tensions between the US and China. Another report by South China Morning Post, a Chinese media publication, revealed that IBM has closed the shutter on its China Development Lab and China Systems Lab. This has left over 1,000 employees in regions like Shanghai, Dalian, and Beijing without jobs.
The Times of India reported that the R&D staff of a tech company in China could not access the firm’s intranet and other services over the weekend. The report quoted posts from several employees on social media platforms in China. It said that IBM informed the employees about the job cuts during an internal meeting on Monday morning.
The tech firm, based in the US, confirmed the layoffs but didn’t share any further details about the job cuts. The Post cited an email shared by an IBM representative that said, “IBM adapts its operations as needed to serve its clients best, and these changes will not impact the firm’s ability to support clients across the Greater China region.”
The representative further noted that the tech firm is trying to have the ‘right teams with the right skills’ to facilitate domestic companies in China, particularly private ones, to develop hybrid cloud and artificial intelligence in partnership. The firm said it will now cater to private entities and certain multinationals operating in the country.
Geopolitical tensions between the US and China have ramped up in recent years since the US banned the export of advanced AI chips to China in 2022. China has since aimed at some US chip manufacturers, like Micron, and reportedly releases other US chips from firms like Intel and AMD from its government devices. This has resulted in multiple firms limiting their physical presence in the Asian country and letting go of their employees based there.
