Microsoft venture Wicresoft to halt China operations, lay off staff, report says

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BEIJING (Reuters) – Microsoft’s joint venture Wicresoft will cease its China operations from Tuesday, a move that will lead to the layoff of about 2,000 staff, Chinese media outlet Caijing reported on Monday, citing sources.

The move is in line with Microsoft’s decision to stop outsourcing after-sales support in China to Wicresoft, according to Caijing, raising questions about how the U.S. tech firm will service China-based users of its Windows and Office products.

The report said the closure would lead to layoffs mainly in the 2,000-strong Microsoft outsourcing team in China.

Wicresoft did not respond to a request for comment.

Microsoft is pulling back from the China market amid growing political and trade tensions between Washington and Beijing, and stiff competition from Chinese rivals like Kingsoft.

IT services provider Shanghai Wicresoft Co. Ltd. was founded in 2002 as Microsoft’s first joint venture company in China, and also operates in the United States, Europe and Japan with a global headcount of over 10,000, Wicresoft’s website says.

Microsoft closed a Shanghai lab focused on developing the Internet of Things and artificial intelligence technologies earlier this year, the South China Morning Post reported last month.

A screenshot of an internal email circulated on Chinese social media on Monday, indicating Microsoft was shutting down its China operations. A Microsoft spokesperson told Reuters this was inaccurate, while Caijing said it referred to Wicresoft.

(Reporting by Eduardo Baptista; Editing by Muralikumar Anantharaman and Bernadette Baum)