Beijing, August 26: IBM planning to shut down its facility in China and lay off around 1,000 people in the country amid facing slow demand for its IT hardware and growth challenges in China. The International Business Machine, also called Big Blue, is an American multinational company located in Armonk, New York. China, the world's No. 2 economy, has been one of the major markets for IBM outside its home country.

According to a report by Bloomberg, IBM would shut down its two businesses in China including (Research and Development and testing. On the other hand, the tech giant is eyeing to serve private enterprises and choose multinational companies in China. The IBM layoffs were confirmed by a Chinese media outlet Yicai today. Infosys Layoffs Not Coming Any Time Soon on Account of Generative AI, Says CEO Salil Parekh.

Yicai said that the changes implemented at International Business Machines would not impact the company's ability to support Chinese customers. Despite China being a great marketplace once, the tech company would have to resort to job cuts as the demand for its IT hardware had been declining amid the challenges to grow in the country.

The report mentioned that major Wall Street giants like Morgan Stanley shifted certain of their operations abroad due to the slowdown of foreign investment in China. It is expected that after shutting down its R&D division in China, IBM may move its Chinese functions to other locations. 

The US and China have been in an unofficial war against each other in terms of dominating the semiconductor and artificial intelligence (AI) market in the world. This can be seen as the Chinese companies have already introduced the competitors to ChatGPT and ChatGPT Sora and other major AI applications provided by the US tech companies in the international market. India is also trying to establish itself as a major semiconductor producer in the coming times. General Motors Layoffs: US Automobile Manufacturing Company GM Lays Off Around 1,000 Employees To Reduce Costs Amid Industry Downturn.

The report said that earlier this year, International Business Machines went on a hiring spree in India for divisions like innovation centres and labs. The tech giant also showed its intention to expand its operations beyond the top-tier cities of India. 

(The above story first appeared on LatestLY on Aug 26, 2024 04:04 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).