(Yicai) Aug. 26 -- US computing giant International Business Machines intends to disband its research and development division in China, affecting more than 1,000 employees.

The move will impact the IBM China Development Lab and IBM China System Lab, the local arm of the New York-based company told Yicai today, adding that the firm will compensate all of the staff who lose their jobs.

China was once IBM's most well-established regional market outside of the United States, and the R&D division’s shuttering marks a significant turning point in the firm’s 40 years in China. IBM shut its China Research Lab in January 2021, whose main product was Watson, a computer system launched in 2011 that can answer questions raised in natural language.

“I’ve served IBM for several decades, and the shutdown of its Chinese R&D division is a pity,” one IBM employee commented.

“The R&D division’s closure will only impact testers, who are not responsible for R&D in the strict sense,” a person who worked in many US software companies told Yicai. “IBM actually moved its entire R&D division to the US years ago.”

“IBM will adjust its operation based on needs,” IBM China said. “These changes will not impact our ability to support customers in China.”

The company remains committed to serving private Chinese companies and multinational corporations, it noted. The firm’s top clients were once large state-owned enterprises in key areas such as finance and energy.

This year is the 40th anniversary of IBM's entry into the Chinese market, Hans Dekkers, general manager for IBM Asia Pacific, said at an artificial intelligence-themed forum held by IBM China on Aug. 22. IBM will hopefully continue to take root in China in the next 40 years or more, he added.

In an interview with Yicai at the same forum, IBM China's Chairman and GM Chen Xudong expressed optimism about IBM's AI business growth in the Chinese market.

Editors: Tang Shihua, Futura Costaglione