Breaking! Microsoft outsourcing rumoured to shut down China operations.

Microsoft China or shutdown?

According to an internal email from Microsoft, "Due to changes in the geopolitical and international business environment, Microsoft will adjust its global strategic layout and will officially cease operations in China on 8 April 2025."

According to Phoenix Tech, the email was sent by Shanghai Wicresoft, and the "China operation"mentioned in the text is actually Microsoft's outsourcing company "Shanghai Wicresoft", not Microsoft China. The disclosure of this truth has eased the original tense atmosphere a little, but it has also focused people's attention on the business changes of Wicresoft Shanghai. Some Wicresoft employees said that on the morning of 7th April, the company announced that all business related to Microsoft was suspended, and the affected business mainly included the Office-related business outsourcing department. The change involves various cities across the country, according to rough statistics, or involves nearly 2,000 people (of which Wuxi involves more than 1,000 employees), the company is currently providing layoff compensation for N +1.

Microsoft response: denied exit rumours.

Liu Run, founder of Rumi Consulting and former director of strategic cooperation at Microsoft, posted: "Microsoft has not stopped its business in China. Nor has Microsoft stopped its outsourcing business in China. This email, from Wicresoft (a Microsoft joint venture). It is an outsourcing business involving overseas user data (for various reasons), migrating to other regions."

Microsoft's earnings report shows that the Chinese market contributes 1.5 per cent (about $3.7 billion) of its total global revenue, a small but still key region for the growth of its cloud services. Microsoft's president has publicly stated that it will reduce its engineering business in China, but maintain its market services. Currently, Windows operating system and enterprise software still occupy an important share in China.

Although Microsoft China has explicitly denied the exit rumours, the contraction of its outsourcing partner's business and the adjustment of specific services reflect the strategic trade-offs of multinational technology companies in a complex international environment. In the future, and the maturity of China's local technology ecosystem will also reshape the competitive pattern of the global industrial chain.