Microsoft joint venture Wicresoft to lay off 2,000 employees in China

Microsoft 's joint venture in China, Wicresoft , is set to cease its operations in the country starting Tuesday (April 8), a report has said, adding that the decision by Wicresoft to shutter its China operations aligns with Microsoft's broader strategy to discontinue outsourcing after-sales support in the region to the joint venture. Citing sources familiar with the matter, Chinese media outlet Caijing (via Reuters) said that this move will result in the layoff of approximately 2,000 employees.

This development has raised questions regarding the future approach of the US technology giant in providing services to its China-based users of popular software products like Windows and Office , the report added.

The report specifically highlighted that the closure would primarily impact the roughly 2,000 individuals comprising Microsoft's outsourcing team within China. These employees were reportedly part of Wicresoft's workforce dedicated to providing support services.

How political tensions between US-China may have impacted Microsoft’s operations
This move by Microsoft's joint venture comes amidst a backdrop of escalating political and trade tensions between Washington and Beijing. Additionally, Microsoft has been facing increasing competition within the Chinese market from local rivals such as Kingsoft, particularly in the software and services sectors.

Shanghai Wicresoft Co. Ltd., the IT services provider in question, was established in 2002 as Microsoft's inaugural joint venture company in China. According to its website, Wicresoft maintains a global presence, with operations spanning the US, Europe and Japan, and boasts a total workforce exceeding 10,000 employees worldwide

Earlier this year, the South China Morning Post reported the closure of a Microsoft lab located in Shanghai that focused on the development of Internet of Things (IoT) and artificial intelligence (AI) technologies.

On Monday, a screenshot of what appeared to be an internal email began circulating on Chinese social media platforms, suggesting a complete shutdown of Microsoft's China operations. However, a Microsoft spokesperson, when contacted by Reuters, clarified that this information was inaccurate. Caijing subsequently reported that the email in question pertained specifically to Wicresoft.