Multinational technology company IBM is relocating its research and development unit out of China.
The announcement was made during a virtual town hall on Monday, when Jack Hergenrother, IBM global enterprise systems development vice president, revealed Big Blue’s plans to concentrate R&D efforts on facilities in other regions.
According to the U.S. company, the decision to move will not impact its capability to support businesses in China. The relocation will affect more than 1,000 individuals, most of whom work in R&D laboratories developing and testing products such as enterprise software.
Big Blue entered the Chinese market in 1992 after it saw potential in the growth of local industries. However, the Chinese government’s push for local businesses to upgrade their services using the expertise of domestic technology suppliers has impacted IBM contracts. In 2023, the company reported a 19.6 percent fall in revenue in the country.
News of IBM’s pullout is the latest development in American companies disclosing plans to downsize or shift away from China‘s production or supply chain.