Tech company Microsoft has reportedly shut down all its operations in Pakistan. This news came on Thursday, just one day after The Seattle Times reported that Microsoft is laying off around 9,100 employees—about 4% of its global staff. This is the biggest round of job cuts by the company since 2023.

According to media reports, Microsoft never had a full office in Pakistan. It only had small liaison offices that helped serve government departments, businesses, schools, and regular customers. These offices were not core branches but support offices for communication and coordination.

The company has been reducing costs for a while. In May, it laid off around 6,000 employees, and in June, a Bloomberg News report said Microsoft would cut more jobs, especially in its sales department.

Leaders call it a bad signal for Pakistan’s future

Former president Arif Alvi reacted to the news with concern. He said Microsoft founder Bill Gates once had serious plans to invest in Pakistan. But those plans failed due to political changes.

He wrote on X (formerly Twitter), “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 favoured Pakistan. The opportunity was lost.”

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

Jawwad Rehman, who was Microsoft Pakistan’s founding country manager, also shared his views on LinkedIn. He said, “This is more than a corporate exit.” Rehman added, “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 the design studio Penumbra, also commented on X. He said that Microsoft’s exit should not be surprising. According to him, Microsoft’s income from Pakistan would have been only about $50 million, which is just 0.018% of the company's total global earnings.

He also said that Microsoft already had fewer staff in Pakistan, and most of its services were being provided through other countries. “Microsoft supplies from Turkey and invoices from Ireland,” he said. Their relationship with Pakistan, he said, was already “very tenuous.”

Microsoft moving to partner-led model, not leaving the market entirely

According to experts, this decision is part of a larger global change. Tech companies like Microsoft are moving away from selling one-time software packages and shifting to a Software-as-a-Service (SaaS) model. In this new model, customers pay regularly for cloud-based services.

This shift is also changing how tech companies operate in different countries. Microsoft has already moved many of its licensing and contract-related tasks for Pakistan to its hub in Ireland. Also, local services are now being provided by Microsoft’s certified partners in Pakistan.

Later in the day, Pakistan’s IT Ministry gave a statement. It said, “Against that backdrop, we understand Microsoft is now reviewing the future of its liaison office in Pakistan as part of a wider workforce-optimisation program. 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.”

The ministry added that the government will keep in touch with Microsoft’s leaders to make sure that any changes do not weaken the company’s long-term presence in Pakistan. “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,” the ministry said.

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