Rumors swirling about Microsoft outsourcing shutting down operations in China.

Reports have surfaced claiming that Microsoft is planning to shut down its operations in China, with an internal email stating that due to changes in the geopolitical and international business environment, the company will cease its activities in the region by April 8, 2025. However, further investigation revealed that the email was actually from Shanghai Wicresoft, Microsoft’s outsourcing company, and not Microsoft China itself. This clarification has somewhat alleviated the initial tension surrounding the rumors but has shifted the focus to the changes happening within Wicresoft Shanghai.

Employees of Wicresoft have reported that all Microsoft-related business was suspended on the morning of April 7, particularly affecting the Office-related business outsourcing department. The impact extends across various cities in China, affecting nearly 2,000 employees, with over 1,000 in Wuxi alone. The company is currently offering layoff compensation as part of the restructuring process.

In response to these rumors, Microsoft has denied any plans to exit the Chinese market. Liu Run, founder of Rumi Consulting and a former director at Microsoft, clarified that the email in question originated from Wicresoft, which is a joint venture with Microsoft. This email specifically pertains to the outsourcing business involving overseas user data, which is being migrated to other regions for various reasons.

While the Chinese market contributes a modest 1.5% (roughly $3.7 billion) to Microsoft’s global revenue, it remains a significant region for the growth of its cloud services. Microsoft’s president has publicly stated that the company will scale back its engineering operations in China but intends to maintain its market services. The Windows operating system and enterprise software still maintain a strong presence in the Chinese market.

Despite Microsoft China’s explicit denial of the shutdown rumors, the adjustment in its outsourcing partner’s operations and the restructuring of specific services reflect the strategic decisions that multinational technology companies must make in a complex international landscape. As the local technology ecosystem in China continues to mature, it will undoubtedly reshape the competitive dynamics of the global industrial chain.