- Wicresoft has stopped handling Microsoft-related work
- Previously, it served as an important JV for Microsoft in China
- An estimated 2,000 workers have lost their jobs as a result
Wicresoft, Microsoft’s joint venture that allows the firm to sell products and services in China, is reportedly halting projects and laying off workers, according to the South China Morning Post (SCMP).
The decision was communicated via email to Wicresoft’s Shanghai-based workers, who were told that work related to Microsoft “will be terminated” owing to “geopolitical shifts and changes in the global business environment.”
It’s believed that around 2,000 workers will lose their jobs as a result of the changes in a big blow not just to workers but to Microsoft’s presence in the region.
The SCMP said that Microsoft-related work comprises most of Wicresoft’s business, citing a worker affected by the change. The publication also noted that workers had been seen leaving the offices with their belongings.
Microsoft remains a major shareholder in the company, accounting for 22% of ownership. A Shanghai-listed firm and a state-owned venture capital firm both own 23% each of Wicresoft. The joint venture operates in around 20 cities across China, including Shanghai, Beijing, Shenzhen, and Hong Kong, but globally, it employs around 10,000 workers.
Microsoft said rumors that it was shutting down operations in China were inaccurate (via Reuters), however Redmond did recently shut down its IoT and AI Insider Lab in Shanghai’s Zhangjiang Hi-Tech Park. Moreover, the move reflects a broader trend of US-China tech decoupling, largely brought on by the escalating trade tensions and reciprocal tariffs.
Moreover, the scale down of operations raises questions on how Microsoft will service its Chinese customers going forward, with a fairly significant chunk of its footprint gone.
TechRadar Pro has asked Microsoft for more information, but the company did not immediately respond.
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