In a significant move, International Business Machines Corporation (IBM) has officially halted all business activities of its investment company and branches in mainland China, marking the end of its 30-year local research and development (R&D) system in the country. The offices in cities like Beijing, Shanghai, and Dalian have been closed, resulting in approximately 1,800 R&D and testing employees losing their jobs overnight. The office equipment at the Beijing HuanYu Building is currently being dismantled.

IBM responded to inquiries from Chinese media, stating that the company is globally integrating its product development functions. Following the adjustment of its Chinese laboratories last autumn, the IBM (China) Investment Company (IBMV), which originally carried IBM's product development functions, has completed its primary mission and is being closed as planned. IBM assured that the closure process will comply with relevant Chinese laws and regulations, but emphasized that IBM China Limited, as IBM's business entity in China, will continue its operations unaffected. The company stated, "Our business focus remains on helping Chinese enterprises seize opportunities brought by hybrid cloud and artificial intelligence technologies. These changes will not affect our ability to support customers in the Greater China region."

Established in 1992, IBMV was IBM's first wholly-owned subsidiary in China, primarily managing R&D operations. Initially, the company focused on hardware manufacturing for large machinery and reaped substantial profits. In the early 2000s, joining IBM in China was considered prestigious. However, with the rise of local internet tech companies offering cost-effective and flexible cloud services, IBM's performance in cloud computing and AI in China has declined. Financial reports show a 19.6% year-on-year drop in IBM's revenue in China for 2023, and a 5% decrease in the first half of 2024, significantly impacting the company's Asia-Pacific revenue growth.

Since 2023, some employees responsible for China projects have been relocated to IBM's offices in India and other Southeast Asian countries. In August 2024, employees in R&D and testing roles in Beijing, Shanghai, and Dalian were informed during an internal meeting that IBM would cease all development tasks in China, with R&D work being transferred to other IBM bases overseas. This move affected thousands of employees, with compensation standards set at N+3.

IBM's latest response reiterates that the company is not exiting the Chinese market but is instead consolidating its global product development functions. The closure of IBMV is part of this strategic adjustment, and IBM China Limited will continue to operate, focusing on hybrid cloud and AI opportunities in the region. The changes are not expected to impact IBM's support for its customers in Greater China.