US computer giant IBM has announced that it will close its subsidiary IBM China Investment Company Limited and its branches starting from March 1, 2025, ending its local research and development operations that have spanned 32 years.
The shutdown plan may affect over 1,800 employees of IBM in Beijing, Shanghai, Dalian, and other locations. This decision comes after the company announced in August 2024 that it would relocate its China-based research activities to other global locations. Reports have indicated that some office locations, including the one in Beijing, have already begun dismantling office equipment.
IBM has stated that its business in China unrelated to research and development will continue to operate, particularly in the fields of hybrid cloud and artificial intelligence technologies to support local enterprises.
Amid China’s continuing economic slowdown and geopolitical uncertainties, Western tech giants have been scaling back their operations in China. IBM’s financial performance in China has been on a downward trend, with a 19.6% revenue decline in 2023. In the first half of 2024, the company’s revenue in China saw a 5% year-on-year decrease, while global revenue increased by 1% during the same period.
According to the South China Morning Post, a representative from IBM mentioned in an email on Friday, February 28th, that IBM China Investment Company Limited has “fulfilled its development mission in China” and will cease operations. However, IBM China Company Limited, the main operating entity of IBM in China, remains unaffected and will continue its operations.
Although IBM Consulting, a department of IBM China Company Limited, achieved growth in China for five consecutive quarters, there are indications that it may also face the risk of layoffs, according to sources.
A former employee revealed that around 1,600 people were laid off by IBM at its research laboratory in China last year, so the closure of the business entity does not come as a surprise to them.
As first reported by the Chinese media outlet “Jiemian News” on Friday, IBM plans to close IBM China Investment Company Limited by the end of March. The report cited an unnamed employee who stated that around 1,600 people were laid off last year, out of a total workforce of approximately 1,800. Most of the remaining employees had left their positions earlier this year, with only a few dozen who had yet to sign termination agreements.