Multiple employees told AFP they had been informed during a brief meeting with US executives on Monday that the company would gut its research and development team in China and move operations to another country.
When asked about the cuts, an IBM spokesman told AFP: "IBM adapts its operations as needed to best serve our clients, and these changes will not impact our ability to support clients across (the) Greater China region".
The employees said more than 1,000 jobs in China could be cut and it was unclear where the company would move its operations.
"Today it was just officially announced," said one employee, who declined to give his name.
The employee, who said he had worked for IBM for ten years, said "everyone remained relatively calm... it feels more like a peaceful separation".
The firm has operated in China for decades and employs thousands of people in the country.
Its research and development teams are based in several cities including Beijing, Shanghai and Dalian.
Members of those teams said they were blocked from accessing the company's server over the weekend.
US-China tensions have led to numerous international companies either laying off employees or relocating some of their China operations elsewhere.
The Wall Street Journal reported in May that tech giant Microsoft had this year asked hundreds of China-based employees in its cloud computing and artificial intelligence operations to transfer out of the country.
The move was motivated by increasing scrutiny over its China presence, the paper said.
US firms in China have increasingly complained about what they see as an unfair business environment, with limited protection for intellectual property and preferential treatment afforded to domestic competitors.
Those fears were compounded last year by a broad crackdown on US consulting firms operating in China.
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