International Business Machines Corp (NYSE: IBM) is laying off 1,000 employees as it shutters a fundamental research division in China.
The company is shuttering two business lines specializing in research, development, and testing, Bloomberg reports.
IBM proposes to serve private enterprises and select multinationals operating in China.
The shutdown of operation mirrors that of a host of companies reducing exposure to China, grappling with a weak domestic economy and regulatory scrutiny.
IBM plans to migrate its Chinese R&D functions to offices elsewhere, the Wall Street Journal reports citing Jack Hergenrother, a company vice president. The company is also looking for more engineers and researchers in places like Bangalore, India.
IBM's move follows intensifying semiconductor sanctions on China by the U.S. backed by the retaliation from China.
In July, IBM reported second-quarter sales of $15.8 billion, up by 2.1% year-on-year, beating the analyst estimate of $15.6 billion. EPS of $2.43 topped the consensus estimate of $2.19.
IBM stock is up over 34% in the last 12 months. Investors can gain exposure to the stock through Vanguard Div Appreciation ETF (NYSE: VIG) and Vanguard High Dividend Yield ETF (NYSE: VYM).
Price Action: IBM stock is down 0.11% at $195.89 premarket at the last check Monday.