IBM China revokes R&D job permissions, responds to Titanium Media saying "Adjusting operations as needed"

On August 24th, news broke that IBM had revoked access for IBM China's research and testing position employees on Friday evening (August 23rd). A laboratory technician mentioned that before the access was revoked, employees were working normally without any prior warning or "signals," and some technicians were even working overtime. Currently, these employees have been removed from the product group of communication software, unable to access the company's intranet via VPN, but can still access emails.

In response to this, IBM provided a statement to Titanium Media regarding this personnel change: IBM will adjust operations as needed to provide the best service to customers, and these changes will not affect our ability to support customers in the Greater China region. Chinese enterprises, especially private enterprises, are increasingly focusing on seizing the opportunities brought by hybrid cloud and artificial intelligence technologies. IBM's local strategy in China is to leverage our rich experience in technology and consulting to build teams with the corresponding skills to help Chinese customers co-create solutions that meet their needs.

Information shared by a blogger on Xiaohongshu (Red) indicates: "The IBM software leader held a 3-minute all-hands meeting, claiming to have made a difficult decision. After announcing the closure of the China lab, the meeting was abruptly cut off."

Looking at IBM's recent business adjustments, this personnel change was seen as a "necessary move" for IBM.

In recent years, IBM's business layout in China has shown a shift. Initially, IBM's business layout in China and even globally focused more on large enterprises, with main cooperative clients in China being large central state-owned enterprises and large banks, a trend that started in the x86 era.

However, in the past two years, influenced by business transformation, IBM first split off the infrastructure management service business of IBM Global Technology Services (GTS) in October 2020, establishing a new company called Kyndryl. This move was seen as IBM focusing more on the strategic move of hybrid cloud + AI. Subsequently, IBM proactively reduced its user base globally, with IBM Consulting Greater China President Chen Kedian telling Titanium Media APP that this was to enhance the "refinement" of IBM services.

On the other hand, due to various international factors, IBM's user base in China has also changed in the past two years. In response to Titanium Media APP, IBM mentioned that it is in a process of business transition, shifting from the previous business layout primarily focused on central state-owned enterprises to gradually empowering more private enterprises.

At the same time, recent leaks indicate that IBM's main business in China is currently mainly focused on two areas - going global and AI In terms of going global, in recent years, Chinese companies seeking new growth points have become the choice of most enterprises. With its international advantages, IBM has also become an important choice for many private enterprises, and even enterprises with state-owned backgrounds, in the process of going global. Similarly, Amazon Web Services, with its international background, is also a key choice for many companies going global.

In the field of AI, at the recent IBM China Enterprise AI Summit, Chen Xudong, Chairman and General Manager of IBM Greater China, publicly stated that in Greater China, IBM will continue to focus on tapping into key large customers, breaking into new markets, and vigorously expanding channels to help Chinese enterprises bridge the gap from experimentation to scaled application of generative AI.

Clearly, this personnel change is also a "growing pain" in the current process of IBM's business adjustment. Facing the future, Chen Xudong has also repeatedly stated that helping Chinese enterprises accelerate the application of enterprise-level AI at scale, and accompanying more Chinese enterprises aspiring to go global to rapidly develop overseas, will be the key focus of IBM in Greater China in the future