Recently, a 15-page internal whistleblower letter has quickly circulated on the internet. The whistleblower is Li Hongyan, former General Manager of Data, Artificial Intelligence, and Automation (DAA) at IBM Greater China Region. In the letter, Li accuses IBM Greater China Region’s Chairman Chen Xudong of multiple wrongdoings, including bribery, forming cliques, and retaliating against disobedient employees in what she calls the “seven sins.”
According to a report by Red Star News on October 15th, an internal whistleblower letter targeting Chairman Chen Xudong has recently surfaced online from within IBM Greater China Region. The whistleblower, who claims to be an ordinary employee, signed off as Li Hongyan, expressing concerns about alleged misconduct and improper behavior by Chen Xudong.
The extensive whistleblower letter, spanning 15 pages in both Chinese and English, details various inappropriate behaviors of Chen Xudong as outlined by Li Hongyan. These include allegations of taking employees and business partners to nightclubs for karaoke, accepting gifts from business partners, leaking company secrets, and retaliating against employees.
Additionally, Li Hongyan questions Chen Xudong’s implementation of the “Enhanced Continuance Management Regulations,” which she claims unfairly and secretly reduces salaries for employees of different levels. She criticizes the rushed execution of the regulations, highlighting the specific targeting of Chinese employees in levels B9/B10.
Regarding Chen Xudong’s own status, Li Hongyan questions why he, despite being directly responsible for the third-quarter performance, is not subjected to the same demotion and salary reduction risks that other IBM employees face for underperformance. She denounces this as blatant double standards and “office bullying.”
The catalyst for the whistleblower incident may stem from Li Hongyan’s sudden dismissal. According to the whistleblower letter, on September 30th, Chen Xudong abruptly informed Li Hongyan that her employment contract was terminated due to underperformance in the third quarter. Li Hongyan expressed shock and raised objections about this decision.
IBM’s official website indicates that Chen Xudong was appointed as General Manager of IBM Greater China Region in March 2022. Prior to joining IBM, Chen had worked at Chinese companies such as Lenovo, Meituan, and Changjiang Storage.
IBM has confirmed the existence of the internal letter and stated that they take any potential violations of the company’s business conduct guidelines seriously and will conduct a thorough investigation.
An internal source at IBM informed Interface News that IBMC (International Business Machines China Limited), where Li Hongyan worked, has begun a downsizing process, and her departure may be a part of this restructuring.
IBM’s frequent layoffs in China are directly linked to its declining performance. The company’s 2023 financial report revealed that the Asia-Pacific region accounted for only 18.92% of its total revenue, significantly lower than the U.S. market’s 51.19% share and other regions like Europe and the Middle East. In 2023, IBM’s revenue in China dropped by 19.6%.
In the past year, IBM China has experienced several business consolidations. In August of this year, the tech giant initiated another round of layoffs, this time targeting over a thousand research and testing employees at IBM China Systems Center under IBMV across Beijing, Shanghai, Dalian, and relocating the research work to other IBM infrastructure facilities overseas.
During the August layoffs, employees were informed that their last working day would be October 31st. Those who signed termination agreements by September 13th would receive compensation equivalent to N+3, while those who signed by September 20th would receive N+1. However, this compensation scheme was not accepted by the affected employees.
Similarly, Li Hongyan’s dismissal due to performance issues did not receive her consent. In an internal letter addressed to all IBM China employees, Li Hongyan alleges that her dismissal was an act of retaliatory bullying by Chen Xudong.