Microsoft shuts down operations in Pakistan after 25 years

Microsoft is set to close its operations in Pakistan after 25 years, sparking concerns among tech industry workers. While the company maintained only liaison offices, its departure is seen by many as disappointing. Meanwhile, the Ministry of IT claimed Microsoft has shifted to a partner-based service model in the country.

This development follows Microsoft's confirmation of approximately 9,000 job terminations worldwide in a new wave of layoffs for 2025, with employees in Pakistan among those impacted.

The company stated that various departments would be affected by the restructuring, although it did not share detailed breakdowns. Reports suggest that even its gaming division will see significant changes.

With a global workforce of over 228,000, the latest layoffs are expected to impact nearly 4% of Microsoft’s employees.

Read: Microsoft laying off several thousand employees

The shutdown will impact all five employees based in Microsoft’s Pakistan office, which is now scheduled for closure. However, the company’s services and products will remain available in the country through its extended partner network.

Jawaad Rahman, the founding head of Microsoft Pakistan, announced the development on LinkedIn, stating that the company had officially ended its direct operations in the country and informed its remaining staff.

While Microsoft’s presence in Pakistan was already limited, with only a handful of employees and a representative office, the move has sparked disappointment  on social media platforms.

Former President Arif Alvi called Microsoft's exit a negative signal for Pakistan’s economic future. He claimed that the company had been planning substantial investment in the country during the previous PTI government, but those plans were derailed due to “regime change.”

Microsoft’s decision to shut down operations in Pakistan is a troubling sign for our economic future. I vividly recall February 2022, when Bill Gates visited my office. On behalf of the people of Pakistan, I had the honor of conferring the Hilal-e-Imtiaz on him for his remarkable… pic.twitter.com/T4SMkp6Mn0

— Dr. Arif Alvi (@ArifAlvi) July 3, 2025

Pakistan’s Ministry of IT issued a statement affirming that Microsoft has expressed its intent to maintain ties with the country despite the organisational changes. 

The tech industry is increasingly shifting from traditional "on-premise" software licensing models to recurring revenue models like Software-as-a-Service (SaaS), influencing the structure of global operations.

Check: Microsoft unveils AI system that outperforms doctors in diagnosing complex health issues

In recent years, the company has relocated licensing and commercial agreements for Pakistan to its Ireland headquarters. Daily service delivery has also been delegated to certified local partners.

In light of this transition, the IT Ministry acknowledged that Microsoft is currently reviewing the future of its representative office in Pakistan as part of its broader global workforce optimisation strategy.

Officials stressed that the shift is not a withdrawal from Pakistan, but a move toward a partner-based service model. 

Like many major tech firms, Microsoft is increasingly redirecting its focus toward artificial intelligence. It recently brought on board British AI expert Mustafa Suleyman to lead its AI division and has made substantial investments in developing its own chips and data infrastructure.