Microsoft ‘ends’ operations in Pakistan after 25 years

Tech software giant Microsoft has shut down all operations in Pakistan, according to media reports on Thursday.

The report comes just a day after Seattle Times reported that Microsoft had announced it was laying off as much as 4%, or roughly 9,100, of its employees in the largest round of job cuts since 2023.

The tech giant was planning to cut thousands of jobs, particularly in sales, according to a Bloomberg News report in June. Microsoft had also announced layoffs in May, which affected around 6,000 employees.

According to reports, Microsoft has never had a full presence in Pakistan — only liaison offices that served enterprise, government, education, and consumer customers.

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Describing the decision as a “troubling sign” for Pakistan’s future, former president Arif Alvi said Microsoft chief Bill Gates once had plans to make a major investment in Pakistan.

However, “regime change upended those plans, and the promise of investment slipped away. By October 2022, Microsoft chose Vietnam for its expansion, a decision in which they had initially favored Pakistan. The opportunity was lost,” he wrote in a post on X.

“Pakistan now spirals in a whirlpool of uncertainty. There is increasing joblessness, our talent is migrating abroad, purchasing power has reduced, economic recovery in the ‘awami’ context feels like a distant and elusive dream,” former president added.

Meanwhile in a post on LinkedIn, Microsoft Pakistan’s former founding country manager Jawwad Rehman said, “This is more than a corporate exit.”

“It’s a sobering signal of the environment our country has created.. one where even global giants like Microsoft find it unsustainable to stay. It also reflects on what was done (or not done) with the strong foundation we left behind by the subsequent team and regional management of Microsoft.”

Habibullah Khan, founder and CEO of design studio Penumbra, said on X the decision came as no surprise.

Microsoft’s revenue from Pakistan would have been $50 million, which Khan estimated at .018% of Microsoft’s global revenue, coupled with the fact that they have been cutting costs and laying people off.

He explained that Microsoft “supplies from Turkey and invoices from Ireland” and “had dramatically reduced head count in Pakistan already, so their relationship with Pakistan was very tenuous”.

‘Microsoft reviewing future of its liaison office in Pakistan’

The global pivot from on-premise software (transactional deals) to Software-as-a-Service (SaaS) (recurring revenue) continues to reshape how technology firms structure their international operations. Microsoft is no exception.

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Over the past few years the company has shifted licensing and commercial-contract management for Pakistan to its European hub in Ireland, while day-to-day service delivery here has been handled entirely by its certified local partners.

This was stated by the IT ministry in a statement issued later during the day.

“Against that backdrop, we understand Microsoft is now reviewing the future of its liaison office in Pakistan as part of a wider workforce-optimisation programme.

“This would reflect a long-signalled strategy, consolidating direct headcount and moving toward a partner-led, cloud-based delivery model, rather than a retreat from the Pakistani market,” it said.

The ministry said the government would continue to engage Microsoft’s regional and global leadership to “ensure that any structural changes strengthen, rather than diminish, Microsoft’s long term commitment to Pakistani customers, developers and channel partners”.