A joint venture between Microsoft and local partners, Wicresoft, will cease its operations in China starting Tuesday, leading to the layoff of approximately 2,000 staff, according to a report by Chinese financial outlet Caijing.
The move follows Microsoft’s decision to stop outsourcing its after-sales support in China to Wicresoft, sparking concerns over how the tech giant will continue servicing Chinese users of its Windows and Office software products.
The layoffs will primarily impact Microsoft’s outsourced support team in China, the report said. Wicresoft has yet to issue an official statement in response to the report.
Founded in 2002 as Microsoft’s first joint venture in China, Shanghai Wicresoft Co. Ltd. provides IT services globally, with operations in the United States, Europe, and Japan, and a workforce of more than 10,000 employees, according to its website.
Microsoft’s pullback in China comes amid intensifying geopolitical tensions between the U.S. and China, as well as rising competition from domestic tech companies such as Kingsoft. Earlier this year, the company also shut down its Shanghai-based lab focused on Internet of Things and artificial intelligence research, as reported by the South China Morning Post.
Confusion briefly erupted on Chinese social media on Monday after a screenshot of an internal email suggested Microsoft was shutting down its China operations entirely. A Microsoft spokesperson later clarified that the email referred specifically to Wicresoft, not Microsoft’s broader operations in the country.
