In a significant move, IBM (IBM.N), the world’s largest technology services company, announced on Monday its decision to completely shut down its Research and Development (R&D) operations in China. This closure is expected to affect more than 1,000 employees across the region.

A spokesperson for IBM confirmed the news in a statement to Reuters, addressing earlier media reports. The spokesperson emphasized that despite the closure, the company remains committed to its clients in the Greater China region. “These changes will not impact our ability to support clients across the Greater China region,” the spokesperson reassured.

The decision to close the China R&D division comes at a challenging time for IBM, as the company continues to face declining demand for its hardware products and struggles to maintain growth in key markets like China. The closure reflects the ongoing adjustments that IBM is making in response to the evolving global technology landscape and its strategic shift towards cloud computing, AI, and other advanced technologies.

IBM has been a key player in China’s tech ecosystem, with its R&D operations playing a critical role in the development of new technologies and innovations tailored to the region. The closure of this division marks a significant shift in the company’s approach to the Chinese market and highlights the broader challenges that international tech companies face in this highly competitive and rapidly changing environment.

As IBM continues to realign its global operations, the impact of these changes on the broader tech industry in China remains to be seen. The closure may open up opportunities for local tech firms to step in and fill the gap left by IBM, further intensifying the competition in the region.

The decision to shut down the China R&D department is part of a broader trend of multinational tech companies reassessing their operations in China amidst growing geopolitical tensions, regulatory pressures, and the ongoing transformation of the global tech landscape.

Stay tuned to TechSage for further updates on this developing story and other significant trends in the technology industry.