Microsoft ends China support outsourcing, laying off 2,000+ employees

In a major blow to the technology workforce in China, Microsoft’s joint venture Wicresoft will shut down its China operations from Tuesday, affecting more than 2,000 employees. The news, first reported by Chinese media outlet Caijing, comes as Microsoft gradually pulls back from the Chinese market amid escalating geopolitical tensions and growing local competition.

The closure primarily affects Wicresoft's team responsible for outsourced after-sales support for Microsoft products. According to Caijing, the move is aligned with Microsoft’s decision to end its outsourcing arrangement with Wicresoft, raising concerns over how the tech giant plans to support Chinese users of its flagship Windows and Office software going forward.

Founded in 2002, Shanghai Wicresoft Co. Ltd. was Microsoft’s first joint venture in China. The IT services provider, which has since expanded its operations to the United States, Europe and Japan, employs more than 10,000 people globally, according to its website. Despite its international presence, the company has remained closely integrated with Microsoft’s China-based support and service infrastructure.

Wicresoft has not released an official statement regarding the reported closure and redundancies. Requests for comment from various media outlets, including Caijing, have so far gone unanswered.

A screenshot of what appeared to be an internal email, suggesting Microsoft was shutting down its China operations, circulated on Chinese social media on Monday. However, a Microsoft spokesperson told Reuters that the claim was inaccurate, clarifying that the closure mentioned in the communication referred specifically to Wicresoft, not Microsoft itself.

Nevertheless, the development signals Microsoft’s ongoing withdrawal from certain areas of the Chinese market. Earlier this year, the company closed a Shanghai-based laboratory focused on artificial intelligence and Internet of Things (IoT) technologies, according to a report by the South China Morning Post. The decision reflects a broader pattern of US tech companies reassessing their operations in China in light of rising political and regulatory risks.

The shutdown of Wicresoft’s China business also comes amid increasing pressure from domestic competitors, such as Beijing-based Kingsoft, which continues to grow its market share in office productivity tools and enterprise software.

The closure is expected to reverberate across China’s technology and outsourcing sectors—not only due to the number of employees affected, but also because of Wicresoft’s long-standing ties with a major American technology corporation. For Microsoft, it underscores a strategic shift—whether towards consolidating operations or stepping back from the market altogether.

At present, it remains unclear how Microsoft intends to deliver customer service and technical support in China without its Wicresoft partnership. Industry observers will be watching closely to see whether it engages new local partners, internalises the function, or adopts alternative service models.

For the more than 2,000 Wicresoft staff affected, the future remains uncertain—yet another sign of the growing volatility facing global tech firms operating at the intersection of innovation and geopolitics.