U.S. information technology giant International Business Machines (IBM) will disband its research and development division in China, which has over 1,000 employees.

The move will impact the IBM China Development Lab and IBM China System Lab, IBM’s Chinese arm confirmed to yicai.com, adding that it will compensate all staffers who will be losing their jobs.

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

IBM said it will remain committed to serving Chinese private companies and multinational corporations, although the U.S. firm used to have large State-owned finance and energy firms as top clients.

“Actually, IBM moved its whole R&D division to the U.S. years ago,” a person who worked for several U.S. software companies said. “This time, the closure of its China R&D division only impacts testers, who are not responsible for R&D in the strict sense.”

China was once IBM’s market with the most complete business structure outside the U.S.

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

IBM China’s chairman and general manager Chen Xudong expressed optimism about IBM’s AI business growth in the Chinese market.

IBM shut down its China Research Lab in January 2021. The main product developed by the lab was Watson, a computer system able to answer questions raised in natural language launched in 2011.(SD-Agencies)