Microsoft Ends Projects With Wicresoft In China

Microsoft IT services joint venture Wicresoft is to halt its China operations, laying off about 2,000 staff, as the US company continues to scale back its presence in China, local Chinese news outlets reported.

The move reflects Microsoft’s decision to stop outsourcing after-sales support in China, media outlet Caijing reported, raising questions over how the company plans to provide support to China-based users of Windows and Office.

Employees at Wicresoft’s Shanghai headquarters said they had received emails on Monday saying their work related to Microsoft “will be terminated”, the South China Morning Post reported.

‘Terminated’

The email said the projects would end due to “geopolitical shifts and changes in the global business environment”.

A Wicresoft employee told the Post that Wicresoft’s business in China is mostly related to Microsoft and that the staff were told their last day would be Tuesday.

The Hong Kong-based newspaper said it had observed people moving out of the Shanghai premises in groups, carrying boxes packed with their personal belongings.

An employee from the Philippines told the paper that the notice was a “shock”.

Employees at Wicresoft’s office in Wuxi, about 145km from Shanghai, were also told that they should leave by Tuesday, an employee at the office told the Post.

The Shanghai-based company was Microsoft’s first joint venture in China in 2002, and Microsoft remains its third-largest shareholder, with 22 percent, after its two Chinese partners, according to data from Qichacha.

The firm maintains 36 locations including its offices in China, the US, Europe and Japan, with about 10,000 staff from 74 countries and has served more than 2,500 corporate and government customers, according to its website.

China pullback

Within China, the company has a presence in about 20 cities, including Shanghai, Beijing, Shenzhen and Hong Kong.

Microsoft said in a statement that rumours it was shutting down all of its China operations were untrue, and that the rumours referred to the end of its projects with Wicresoft in China.

The company earlier this year shuttered an Internet of Things (IoT) and AI lab it operated in Shanghai’s Zhangjiang high-tech zone, the Post reported last month.

Last May Microsoft offered relocation options to 700 to 800 of its skilled staff in China and carried out large-scale layoffs as it reduced its presence in the country, in addition to closing all its authorised bricks-and-mortar stores on the mainland.

The company’s president, Brad Smith, told a congressional hearing in June of last year that China accounted for only about 1.5 percent of the company’s global revenue.