Microsoft Corp’s (NASDAQ:MSFT) joint venture Wicresoft proposed to end its China operations from Tuesday.

The move involves the downsizing of ~2,000 staff, Reuters reported, citing Chinese media outlet Caijing on Monday.

Microsoft had shared plans to stop outsourcing after-sales support in China to Wicresoft.

Also Read: Microsoft Plans Proprietary AI To Power Business Software And Reduce OpenAI Dependence: Report

Microsoft’s move overlapped with growing geopolitical tensions between Washington and Beijing involving semiconductor sanctions and U.S. tariffs on trading partners.

Shanghai Wicresoft was founded as Microsoft’s first joint venture company in China in 2002.

Reuters report also stated that Microsoft closed a Shanghai lab focused on developing the Internet of Things and artificial intelligence technologies in 2025.

Microsoft also paused data center expansions in multiple regions, including Indonesia, the U.K., and the U.S., amid concerns about semiconductor tariffs.

It halted key data center projects due to concerns about AI computing overcapacity and semiconductor tariff impacts.

Prior reports indicated Microsoft’s plans to reduce its workforce, targeting employees failing to meet expectations.

The company made several workforce adjustments in 2024. It let go of nearly 2,000 workers from its gaming division. In June, Microsoft reduced its workforce by approximately 1,000 employees.

In July, it conducted another round of layoffs, and in September, Microsoft laid off another 650 employees in its gaming division.

Microsoft laid off 10,000 employees in early 2023, implying 4%-5% of its workforce.

MSFT Price Action: MSFT stock was down 0.59% at $357.72 at the time of publication on Monday.

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