Microsoft Joint Venture Wicresoft to Halt China Operations and Lay Off 2,000 Staff Amid Tensions
Microsoft’s joint venture in China, Wicresoft, will halt its operations in the country starting Tuesday, according to a report by Chinese media outlet Caijing. This decision will result in the layoff of approximately 2,000 staff, many of whom were part of Microsoft’s outsourcing team in China. The move comes as part of Microsoft’s broader strategy to cease outsourcing after-sales support for its products, including Windows and Office, to Wicresoft. This raises concerns about how Microsoft will manage its user base in China, given the changing dynamics of its presence there.
The closure of Wicresoft’s operations is reflective of Microsoft’s ongoing pullback from the Chinese market, which is influenced by rising political and trade tensions between the United States and China. Additionally, the company faces increased competition from local Chinese tech firms such as Kingsoft, which has posed a challenge to Microsoft’s dominance in the region. Microsoft’s decision to reduce its reliance on local partnerships like Wicresoft is seen as a response to these external pressures.
Founded in 2002, Wicresoft was initially set up as Microsoft’s first joint venture in China. The company has since expanded globally, operating in the U.S., Europe, and Japan with a workforce of over 10,000 employees. Despite this global presence, the decision to halt operations in China reflects the challenges faced by international companies navigating the complexities of the Chinese market, particularly in the tech sector.
Earlier this year, Microsoft also closed a Shanghai lab focused on the development of Internet of Things (IoT) and artificial intelligence (AI) technologies. While Wicresoft did not comment on the report, Microsoft denied a circulated email that suggested the shutdown involved its direct operations in China. The situation underscores the strained business environment for U.S. tech companies in China, amidst growing geopolitical tensions.
Source: reuters