Microsoft Denies China Exit Rumors, Affirms Commitment

On April 7, rumors began circulating that Microsoft would halt its operations in China starting from April 8, 2025. The rumors were fueled by an email that cited geopolitical changes and adjustments in Microsoft's global strategy as the reasons behind the decision. The email specifically mentioned that the shutdown would impact nearly 2,000 employees, with a significant number based in Wuxi. Employees of the outsourcing company Shanghai Wicresoft, which is affiliated with Microsoft, reported receiving a notice on April 3, informing them that operations would cease on April 4. The compensation package offered to the affected employees was N+1, which typically means one additional month's salary on top of their notice period.

In response to these rumors, Microsoft China issued an official statement denying the reports. The statement emphasized that the information regarding Microsoft's cessation of operations in China was inaccurate. Microsoft clarified that any inquiries about the business and operational issues of Wicresoft should be directed to the company itself. This clarification was made in response to multiple inquiries from various media outlets.

Wicresoft, established in 2002, is Microsoft's first joint venture in China. The company is dedicated to providing end-to-end, one-stop digital transformation services to global clients. Headquartered in Shanghai, Wicresoft operates 36 delivery centers worldwide, including locations in China, the United States, Europe, and Japan. The company employs over 10,000 staff from 74 different countries.

The rumors about Microsoft's potential exit from China have raised concerns about the company's long-term strategy in the region. However, Microsoft's official denial suggests that the company remains committed to its operations in China. The clarification also highlights the distinction between Microsoft's core operations and those of its affiliated companies, such as Wicresoft. This distinction is important for understanding the scope of Microsoft's activities in China and the potential impact of any operational changes.

The incident underscores the importance of accurate information in the context of global business operations. Rumors and misinformation can have significant implications for a company's reputation and employee morale. Microsoft's prompt response to the rumors demonstrates its commitment to transparency and clarity in its communications with stakeholders. The company's continued presence in China, despite the rumors, indicates its ongoing investment in the region and its confidence in the market's potential.

It is worth noting that over the past year, there have been multiple reports of adjustments or changes in Microsoft's operations in China. For instance, in July of last year, there were rumors that Microsoft would close all its offline authorized stores nationwide, retaining only its official website and JD.com flagship store. Microsoft responded by stating that it continuously evaluates its retail strategy to meet the changing needs of its customers, deciding to integrate its channels in the mainland China market. Customers can still access Microsoft's comprehensive consumer products and services through retail partners and the official website.

In June of last year, Microsoft's CEO, Satya Nadella, revealed that Microsoft's revenue from China accounted for approximately 1.5% of its total income, indicating a reduction in the company's business scale in the region. Despite this, the contribution of Chinese enterprises to Microsoft's cloud business appears to be significant. Recent industry reports suggest that in the second half of last year, revenue from the China market accounted for the highest proportion of Microsoft's global cloud OpenAI business revenue, approximately one-quarter. These clients include large model companies, internet giants with large model businesses, and Chinese enterprises expanding overseas. Additionally, over the past two years, services such as Azure OpenAI have rapidly driven Microsoft's cloud revenue in China, becoming a new growth engine for the company.