The company is moving its China R&D functions to other overseas facilities, Jack Hergenrother, an IBM executive, told employees at a virtual meeting on Monday morning, according to employees who attended. Hergenrother said IBM faced intensifying competition in China with its infrastructure business declining in the past few years, the employees said.

Hergenrother said IBM plans to concentrate its R&D in several regions, the employees said. IBM has told some employees it is adding engineers and researchers in places outside China including in Bengaluru, India, according to employees who were briefed.

The closure will affect more than 1,000 people, mostly working for the company’s R&D labs, the employees said. They are based in several Chinese cities, including Beijing and Shanghai.

A representative of IBM China didn’t respond to requests for comment.

Geopolitical tensions between the U.S. and China have led many multinational companies to reassess their business in China, with some laying off employees and relocating operations to other countries.

IBM once saw China as a major growth market, but its market share has tumbled in recent years as local competitors upgraded their services and Beijing pushed Chinese buyers to purchase more from domestic technology suppliers, in a campaign dubbed “Delete America.” IBM said its revenue in China fell 19.6% last year.

U.S. companies doing business in China also face stricter scrutiny by American policymakers in strategic areas such as artificial intelligence. Microsoft is downsizing its cloud-computing and AI-research operations in China and asking local employees to consider transferring to other locations.

In 2021, IBM closed a China research lab after more than two decades of operation.

Write to Raffaele Huang at raffaele.huang@wsj.com