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IBM Corp. is closing its research and development unit in China, impacting around 1,000 employees, according to a report by the Wall Street Journal on Monday. The decision comes amid a broader trend of technology companies reducing their presence in China.
The announcement was made during a virtual meeting with employees across Asia, where IBM officials revealed the plans to shut down the unit. The move aligns with a growing trend of multinational tech firms reevaluating their operations in China, a country that has been a significant player in the global tech industry but is experiencing shifts in investment and operational strategies.
Some of the positions from the Chinese research unit are expected to be relocated to other IBM offices, including in Bangalore, India. This transition reflects a strategic realignment as IBM aims to consolidate its global operations and tap into different markets for its research and development needs.
An IBM spokesperson in China declined to comment on the closure, leaving the specifics of the operational changes and the impact on affected employees largely undisclosed. The decision has had an immediate effect on IBM’s stock, which fell by 0.2% in premarket trading on Monday.
The closure of IBM’s research unit in China underscores the shifting dynamics in the tech industry, where companies are increasingly diversifying their research and development activities away from China. This move is part of a broader strategy to mitigate risks and adapt to changing geopolitical and economic conditions.
As IBM shifts its focus, the tech industry will be watching closely to see how these changes impact its global operations and whether other companies will follow suit in modifying their strategic presence in China.