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Beijing - Computer software producer Adobe Systems will shut its Chinese research and development arm, as US technology firms face an increasingly hostile government in the world's second-biggest economy.
The California-based company will maintain its China sales offices, Adobe said on Wednesday, but research and development (R&D) operations will cease by the end of December.
Lay-offs have already begun and will affect about 300 people, a source said.
Foreign companies, particularly US technology firms, have come under increasing scrutiny in China as Beijing pushes hard on information security in the wake of last year's cyber espionage revelations by former US National Security Agency contractor Edward Snowden.
Quite negative
The government has also ramped up investigations into foreign companies operating in China, wielding a 2008 anti-monopoly law to probe numerous firms' local practices.
Western business lobbies have labelled the tactic as protectionism.
"The overall climate in China against Western enterprises has been quite negative and that's one of the major reasons," said the source.
The closure of Adobe's China R&D arm is also affected by rampant software piracy in the country, as well as the company's shift towards a cloud-based software-as-a-service business model and away from one-off boxed sales of software and licences, said the source.
Software giant
"Adobe's presence in China will be focused on market development activities moving forward, and it will be dissolving and closing its R&D branch there," the company said.
"Adobe will maintain its sales presence in Shanghai, Beijing, Guangzhou, Shenzhen, Hong Kong and Taiwan."
Other US technology firms which have drawn the ire of China's government include software giant Microsoft and chipset maker Qualcomm.
Adobe last week reported its worst quarterly revenue for Asia in the last five years. For the three months ended August 29, sales in Asia fell 25% to $148.2m.
