IBM shutters China R&D facility in latest retreat by US companies. IBM is ceasing operations of its research and development division in China, marking the most recent withdrawal from the country by prominent American technology corporations.

According to attendees of a virtual conference on Monday morning, Jack Hergenrother, an IBM official, informed staff that the business is relocating its research and development activities in China to other international sites. Hergenrother stated that IBM encountered escalating competition in China as its infrastructure business had a consistent decline in recent years, according to the employees.

The employees reported that Hergenrother stated that IBM intends to focus its research and development efforts in multiple areas. As per the briefing received by certain employees, IBM has communicated its intention to recruit engineers and researchers in locations outside of China, such as Bengaluru, India.

As per the employees, the shutdown will impact around 1,000 individuals, primarily employed in the company’s research and development laboratories. Their headquarters are located in various key Chinese cities, such as Beijing and Shanghai.

No response was received from a representative of IBM China in response to requests for comment.

The geopolitical tensions between the United States and China have prompted numerous multinational corporations to reevaluate their economic activities in China, resulting in the termination of personnel and the transfer of operations to other nations.

IBM had regarded China as a significant market for expansion, but its market share has significantly declined in recent years due to the implementation of service upgrades by local competitors and the aggressive efforts of Beijing to encourage Chinese customers to buy more from local technology vendors, known as the “Delete America” campaign. IBM reported a 19.6% decline in its revenue in China last year.

American officials subject U.S. corporations engaged in business activities in China to more rigorous examination inside key domains like artificial intelligence. Microsoft is reducing the scale of its cloud-computing and AI-research activities in China and requesting local staff to contemplate relocating to alternative sites.

Following over twenty years of operation, IBM decided to shut down its research laboratory in China in 2021.