IBM is closing its R&D facilities in China, including its research and development lab and systems lab, amid geopolitical tensions, SCMP reported.

Mainland media also reported that IBM's R&D staff in the country had been unable to access its internal network since last weekend. The Armonk, New York-based company then announced the layoffs in an internal meeting on August 26.

IBM joins list of tech firms scaling back operations in China

“IBM adjusts operations as needed, but the changes will not impact our ability to support customers across mainland China,” an IBM representative said.

IBM is the latest multinational technology giant to cut jobs in China, as intensifying competition between the country and the United States forces global businesses to adjust their operations in the market of a billion people.

Before IBM, Swedish telecommunications equipment maker Ericsson and electric car maker Tesla, e-commerce giant Amazon.com and chip company Intel have also scaled back their operations in the Chinese market.

IBM’s sales in China have been falling steadily in recent years. In 2023, IBM’s revenue in the country fell 19.6%, compared with a 1.6% increase in revenue across the Asia-Pacific region, according to the company’s annual report.

IBM's financial report also showed that sales in China in the first 6 months of 2024 decreased by 5%, while revenue in Asia-Pacific increased by 4.4%.

According to IBM China, the R&D labs there “have over 24 years of outstanding development experience” and are behind hundreds of key products and innovations.