Microsoft Drops 3.33% on China Exit Rumors

On April 7, Microsoft's stock dropped 3.33% in pre-market trading, following the circulation of an email screenshot claiming that the company would cease operations in China starting April 8, 2025. The email cited geopolitical and international business environment changes as the reason for the strategic shift.

Microsoft China promptly addressed the rumors, stating that the reports about halting operations in China were inaccurate. The company clarified that the email in question was related to Wicresoft, a separate entity, and any inquiries about its operations should be directed to Wicresoft itself.

Wicresoft, a digital transformation service provider, was co-founded by microsoft and the Shanghai municipal government in 2002. The company serves a global clientele across various industries, including high-tech, finance, and manufacturing. The recent email indicated that the affected business units primarily involved Office-related outsourcing services, with approximately 400-500 employees impacted.

This development comes amidst ongoing speculation about Microsoft's operations in China. Earlier this year, reports surfaced that Microsoft had closed its Shanghai-based IoT and AI lab, marking a significant reduction in its Chinese operations. The lab, which focused on developing IoT and AI technologies, had been operational since 2019 and had supported numerous projects and trained thousands of professionals.

Despite these setbacks, Microsoft's core cloud services, such as Azure, continue to thrive in China. Azure's revenue in the region has shown remarkable growth, contributing significantly to Microsoft's global earnings. This shift towards cloud services reflects Microsoft's strategic pivot away from traditional software licensing, which faces increasing competition from domestic alternatives like Kingsoft Office.