US computing giant IBM is shutting down one of its major entities in China, 32 years after it was established to manage local research and development operations.

The decision follows last year's lay-offs of over 1,000 employees at the IBM China Development Lab and China Systems Lab across several cities.

IBM (China) Investment Company Limited had "completed its mission" of carrying out development in China and would cease operation, a company representative said by email on Friday.

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Known by its nickname Big Blue, IBM will continue its operations in China through another entity, IBM (China) Company Limited. "Our priority remains helping local clients seize opportunities in hybrid cloud and artificial intelligence with our deep technology and consulting expertise," the representative said, stressing that the change would not affect the company's ability to support clients in the country.

Western tech giants have been trimming their Chinese businesses amid geopolitical uncertainties.

IBM (China) Investment, registered in 1992, and IBM (China), established eight years later, are owned by Hong Kong-based IBM China/Hong Kong Limited, according to corporate information provider Aiqicha.

A former employee laid off in October said around 1,600 employees at IBM's Chinese research labs were made redundant last year. The person expressed little surprise at the business entity's closure.

According to Chinese media outlet Jiemian, which first reported the shutdown on Friday, IBM plans to close IBM (China) Investment by the end of March. The report, citing an unnamed employee, indicated that the entity had laid off 1,600 of around 1,800 workers last year. Most of the remaining staff already left earlier this year, while a few dozen have yet to sign termination agreements.

Some former staff have already embarked on new careers.

Xie Dong, former chief technology officer at IBM Greater China Group, is serving as technology chief at state-owned Beijing Electronic Digital and Intelligence, a local provider of computing power and cloud infrastructure for AI applications. Xie was previously vice-president at IBM China Systems Lab and director of the IBM China Research Lab.

IBM's revenue from China dropped 5 per cent in the first half of 2024, compared with a 1 per cent growth in global sales, according to its financial report.

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