IBM is shutting down a key research division in China in a move affecting more than 1,000 employees, local media including Yicai reported, in the latest pullback by a US name from the world’s No. 2 economy.
The company is shuttering two business lines that specialize in research-and-development and testing, Yicai said, citing an IBM statement.
IBM would instead turn toward serving private enterprises and select multinationals operating in China going forward, Yicai added.
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“IBM adapts its operations as needed to best serve our clients, and these changes will not impact our ability to support clients across the Greater China region,” the IBM statement said.
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 depress sentiment. Wall Street names such as Morgan Stanley have shifted some operations abroad, while foreign investment has slowed partly because of concerns that Beijing is favoring local players.
Tech is a particularly sensitive arena given the US and China are locked in a conflict over crucial spheres, from semiconductors to artificial intelligence. Beijing is trying to foster the growth of national champions such as Huawei Technologies Co (華為), worried that restrictions on US technology would hamper the country’s longer-term prospects and curtail its geopolitical clout.
IBM plans to move its Chinese research-and-development functions to offices elsewhere, the Wall Street Journal reported, citing an employee briefing hosted by IBM Vice President Jack Hergenrother.
The US company told some employees it is adding engineers and researchers in places including Bangalore and India, the Wall Street Journal said, citing employees who were briefed on Monday.
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