Microsoft Shuts Down Operations in Pakistan After 25 Years
In a major development, global tech giant Microsoft has decided to shut down its operations in Pakistan after functioning for nearly 25 years. This decision came to light through various media reports published on Thursday, sparking widespread concern in Pakistan’s technology and business sectors.
This news surfaced just a day after the Seattle Times reported that Microsoft is laying off around 9,100 employees, nearly 4% of its global workforce, marking the company’s largest round of layoffs since 2023. Earlier, in May and June, Microsoft had already announced thousands of job cuts, particularly affecting the sales departments, according to Bloomberg News.
Although Microsoft operated in Pakistan for over two decades, it never established a complete operational setup in the country. Instead, it functioned through liaison offices, offering services to enterprise clients, educational institutions, government sectors, and general consumers.
Former President Arif Alvi Calls It a Warning Sign
Former President Dr. Arif Alvi expressed deep concern over the move, calling it a “troubling signal for Pakistan’s future.” On social media platform X (formerly Twitter), he wrote that Microsoft founder Bill Gates had once shown strong interest in investing in Pakistan. However, due to political instability and regime changes, those plans were disrupted.
Dr. Alvi revealed that Microsoft had initially preferred Pakistan over Vietnam for expansion. But by October 2022, the company had shifted its focus to Vietnam, leading to a lost opportunity for Pakistan. He added that the country is now caught in a cycle of uncertainty, rising unemployment, brain drain, weakened purchasing power, and a fading dream of economic revival.
Former Microsoft Pakistan Head Criticizes the Environment
Jawaad Rahman, Microsoft Pakistan’s former country manager, also reacted to the news on LinkedIn. He stated that the move is not just a corporate decision but a reflection of the unfavorable environment in the country. He criticized the lack of continuity and support from the leadership that followed, suggesting that the foundational work laid by earlier teams had not been maintained.
Business Experts Say the Decision Was Expected
Technology entrepreneur Habibullah Khan, founder of Penumbra Design Studio, said that the move shouldn’t come as a surprise. He estimated that Microsoft generated about $5 million in revenue from Pakistan, which accounts for a mere 0.018% of its global earnings.
He added that Microsoft had already significantly reduced its local workforce and was managing supply through Turkey and invoicing from Ireland. As a result, its physical presence in Pakistan had already become minimal.
Ministry of IT: This is Not an Exit but a Strategic Shift
Responding to the reports, Pakistan’s Ministry of Information Technology issued a clarification, saying that global tech firms, including Microsoft, are now transitioning from traditional software sales to a cloud-based Software-as-a-Service (SaaS) model.
According to the ministry, Microsoft had already shifted its licensing and commercial operations for Pakistan to its European headquarters in Ireland, and daily operations were being managed through local certified partners.
The ministry further clarified that Microsoft is currently reviewing the status of its liaison office in Pakistan as part of its global restructuring plan. It emphasized that this change reflects a broader strategy to reduce direct employment and adopt a more partner-driven, cloud-focused business model.
Government in Talks to Preserve Long-Term Partnership
The statement concluded with an assurance that the Pakistani government will remain in contact with Microsoft’s regional and global leadership to ensure that any organizational changes do not impact the company’s long-term commitment to local consumers, developers, and partners. Instead, efforts will be made to strengthen this relationship further.
