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IBM China Investment Company and Subsidiaries to Cease Operations on March 1

Feb 28, 2025, 23:30pm2025/02/28 23:30:51 Pandaily

According to Chinese media outlet Jiemian citing unnamed sources, IBM has announced internally that IBM Commercial Machine (China) Investment Co., Ltd. and its subsidiaries will cease operations starting from March 1, 2025, with related office spaces also being discontinued.

Last August, IBM declared that IBM Infrastructure had decided to relocate the research and development operations of the China Systems Laboratory to other IBM infrastructure bases overseas, thereby withdrawing all research and development activities from China. This adjustment pertains to the IBM China Systems Center under IBM China Investment Company (IBMV), primarily responsible for research and testing, with employees spread across various cities nationwide, including Beijing, Shanghai, Dalian, involving over 1,800 individuals.

As per an internal source at IBM, the Beijing office location of IBM China Investment Company in the Galaxy Building has already started dismantling relevant office equipment.

Following the issuance of layoff notices last year, employees at IBM China Investment Company have raised demands concerning severance and compensation, including 2N compensation (where N is not capped at the monthly salary benchmark) and a six-month buffer period, monetization of annual leave, accrued paid home leave, stock monetization, among others. However, these demands have not been met. An IBM employee listed in the layoff roster disclosed to Jiemian that they did not receive the buffer period and ultimately only received N compensation.

According to this employee, around 1,600 employees at IBM China Investment Company left last year following the layoff list, while the remaining staff have been gradually departing this year. However, several dozen individuals have yet to sign departure agreements. Following the notice of ceasing operations at IBM China Investment Company, these employees have received notices of being put on standby.

Financial reports indicate that in 2023, IBM’s revenue in the Chinese market dropped by 19.6%, becoming a significant factor hindering revenue growth in the Asia-Pacific region. In the first half of 2024, IBM’s sales in China declined by 5% year-on-year.

Apart from infrastructure-related businesses, IBM’s current operations in China also include consulting services (IBMC). According to official information released by IBM last year, the number of IBM Consulting clients in China decreased by 45% over the past two years. Despite the reduction in client numbers, IBM Consulting has experienced growth for five consecutive quarters in the Chinese market.

However, as disclosed by an IBM employee, IBMC will also undergo layoffs this year.

On Friday afternoon, IBM China responded officially, stating: “IBM is consolidating product development functions globally. Following last autumn’s adjustments to the Chinese labs, International Business Machines China (Investment) Co., Ltd., which primarily served as the carrier of IBM’s product development functions, has fulfilled its main mission and therefore plans to close. The closure process will be in accordance with relevant national laws and regulations. IBM (China) Co., Ltd. is IBM’s operational entity in China, and its operations remain unaffected; our business focus continues to be aiding Chinese enterprises in seizing opportunities presented by hybrid cloud and artificial intelligence technologies. These changes will not affect our ability to support clients in the Greater China region.”

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