Microsoft is making a significant move in China by ending its joint venture operations with Wicresoft, a decision that will reportedly lead to the layoff of approximately 2,000 employees. According to Chinese business outlet Caijing, Wicresoft will officially halt its operations in China starting Tuesday. This marks another strategic withdrawal by the U.S. tech giant from the Chinese market amid rising geopolitical tensions and growing competition.
The primary reason behind this exit appears to be Microsoft’s decision to stop outsourcing after-sales support for its Windows and Office products in China to Wicresoft. The company has not yet disclosed how it plans to handle user support in China going forward, raising concerns among existing customers.
Wicresoft, a major IT services provider based in Shanghai, was established in 2002 as Microsoft’s first joint venture in China. Over the years, the company expanded its reach, operating across the United States, Europe, and Japan, and employing more than 10,000 people worldwide, according to its official website.
However, Wicresoft has remained silent on the recent developments and has not responded to media inquiries about the reported shutdown. Similarly, Microsoft has declined to comment on the layoff reports, although a company spokesperson refuted claims circulating on Chinese social media that suggested Microsoft was completely shutting down its China operations. According to Caijing, those messages referred specifically to Wicresoft.
The decision to cut ties with Wicresoft aligns with Microsoft’s broader strategy to scale back in China. Earlier this year, Microsoft shut down a research lab in Shanghai focused on artificial intelligence and Internet of Things (IoT) technologies. That move signaled a significant shift in the company’s long-term investment approach in the region.
The timing of this development is particularly telling, coming as trade tensions between Washington and Beijing continue to escalate. The tech industry, in particular, has been caught in the crossfire, with Chinese firms like Kingsoft becoming formidable local competitors to U.S. tech giants.
Industry analysts believe this move could lead to operational challenges for Microsoft in China, especially in maintaining customer service quality without the Wicresoft team. Others see it as part of a growing trend where Western companies reevaluate their presence in China due to political risks, data security concerns, and increasing localization pressures.
While the full impact on Microsoft’s Chinese user base remains unclear, the loss of 2,000 jobs is likely to make waves in the Chinese tech employment landscape. It also reflects the growing uncertainty faced by global firms operating in politically sensitive markets.
As this story unfolds, it remains to be seen how Microsoft will adapt its support infrastructure in China and what this means for its global strategy going forward.
