His first ‘Joint Venture’ stops operating and dragging thousands of layoffs

For more than three decades, Microsoft has maintained a constant presence in China. Although the country represents only a fraction of its global incomeRedmond’s company opted to position himself there with products such as Windows and Officeand with a network of research centers aimed at collaborating with the local technological ecosystem. Today, in a scenario marked by geopolitical tension, that bet begins to be diluted: Microsoft has begun to undo agreements and to close facilities, in what seems to be part of a broader reorganization plan in the region.

A Joint Venture Microsoft in China throws the closure. As reported South China Morning Post, Wicresoftthe first Joint Business Created by Microsoft in the country, it will cease its operations. Although the situation for American technological ones in China has been complicated over time, the announcement has caught by surprise. According to the Hongkonese newspaper, the employees were informed on Monday that their work linked to the software firm led by Satya Nadella “will come to an end.” Citing the Chinese medium Caijing, the measure will affect some 2,000 workers.

Sudden notification. Wicresoft, based in Seattle and more than 10,000 workers worldwide, is dedicated to offering advice, technological solutions and operational support for large international brands. In China, its presence extended to 20 cities, including Shanghai, Beijing, Shenzhen and Hong Kong, where it managed projects of different scale for Microsoft. According to the aforementioned media, the news of the closure came unexpectedly: many employees received the notice by mail this Monday and, in several venues, they were asked to leave the place as soon as Tuesday, without margin to react.

A question about the future of support. The closure of Wicresoft leaves in the air who will manage Microsoft’s after -sales support in China, a market where access to technical services remains key to many users and companies. The company was responsible for giving technical assistance to key products such as Windows 10, Windows 11 and Office, among others, adapting the service to the particularities of the local environment. According to Reutersthis change is aligned with the intention of Microsoft to centralize and reduce subcontracting in the country, although it has not been revealed who will take over or in what deadlines.

Impulse for local alternatives. Microsoft’s progressive withdrawal in China leaves free space that other local firms have not taken advantage of. One of the big beneficiaries is Kingsooft Office, head of WPS Office, An office suite compatible with Microsoft formats that has already exceeded 100 million daily users in the country. Her experience in the local market and her functional resemblance with Office (at first glance seems like a clone) have made it an option increasingly adopted by public organizations, banks and telecommunications operators.

Since 2022, Chinese state companies are obliged to submit quarterly reports on their progress in the replacement of foreign software for national alternatives. As the American newspaper The Wall Street Journal points outthis policy, promoted from Beijing in full technological and commercial war with the United States, has directly favored companies such as Kingsooft, which now have the implicit support of the state apparatus. The result: less licenses for Office and more WPS deployment in strategic sectors where Microsoft moves.

SDE WICRESOFT step is not an isolated case. In the last two years, Microsoft has progressively reduced its presence in the Asian giant. In 2023, The company closed all its physical stores in China, offered relocations to hundreds of employees in the artificial intelligence area and applied template cuts. More recently, he has also hardened his internal security protocols, forcing its workers in China to use iPhones exclusively to access corporate platformsdue to the restrictions imposed by the lack of Google Play in the country.

Shanghai’s laboratory is another example of that replication. Inaugurated in 2019 as the largest center of its type outside the United States, the IATI & AI Insider Lab was conceived to promote the development of strategic technologies in collaboration with local companies. He closed its doors in early 2024 after supporting more than 250 projects and training thousands of professionals. Its closure confirms a trend that, although not entirely unexpected, does show a deep change in Microsoft’s strategy in one of the countries where it has been operating longer and where they had made multiple bets.

Withdrawal in full trade war. The Microsoft replication does not occur in a vacuum. It coincides with a new escalation in the tensions between Washington and Beijing that has reactivated the large -scale commercial war. Donald Trump has threatened to impose additional 50% tariffs if China does not withdraw its retaliation measureswhich arrived after the first waves of taxes driven by the White House after their return to power. In this climate, many quoted American companies are collapsing in the stock market, dragging with it to entire sectors and other markets in the world.

Images | VD Photography | / Ricardo | Silvestre Rui

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