Microsoft shuts down Pakistan office after 25 years, lays off staff

Karachi: In a major development for Pakistan’s tech sector, Microsoft has officially closed its office in Pakistan and laid off its remaining five employees, according to a report by Dawn.

The move marks the end of a 25-year presence in the country and has sparked widespread reaction online.

The news first surfaced through a LinkedIn post by Jawad Rehman, former head of Microsoft Pakistan, who described the closure as the "end of an era."

Rehman wrote, “Today, I learned that Microsoft is officially closing its operations in Pakistan… an era ends.”

Responding to Dawn, a Microsoft spokesperson confirmed the closure and said the company will continue to serve customers through its regional offices and strong partner network, following a model it already uses in several countries.

According to Dawn, Microsoft’s decision is part of its global restructuring efforts and its increasing focus on cloud computing, AI, and Software-as-a-Service (SaaS). This week, Microsoft also announced nearly 9,000 global job cuts, representing 4% of its workforce, following earlier layoffs in May.

Pakistan’s Ministry of IT and Telecommunications clarified that this should not be interpreted as Microsoft exiting Pakistan entirely. Instead, it is a strategic move towards a cloud-based, partner-led model, consistent with international tech trends.

Tech analyst Habibullah Khan told Dawn that as companies move away from on-premise models to cloud and SaaS, maintaining physical offices in smaller markets becomes less necessary. He stressed this is part of a global trend and not a reflection of Pakistan’s market potential.

Khan also noted that while other multinationals like Careem have scaled back operations in Pakistan, Microsoft's move is more about cost-efficiency and strategic realignment.

Jawad Rehman, in his post, expressed disappointment, stating:

“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.”

He added that the strong foundation Microsoft had laid in Pakistan was not effectively built upon by subsequent leadership.

Former President Dr. Arif Alvi also weighed in on X (formerly Twitter), calling the shutdown a "troubling sign for our economic future."

Recalling Bill Gates’ 2022 visit to Pakistan, Alvi said he had conferred the Hilal-e-Imtiaz on Gates for his contributions to polio eradication. He blamed political instability and the ouster of former PM Imran Khan for Microsoft choosing to expand in Vietnam instead of Pakistan.

“Pakistan now spirals in a whirlpool of uncertainty. There is increasing joblessness, our talent is migrating abroad, and economic recovery feels like a distant dream,” Alvi added.

In recent years, several multinational companies across different sectors have either shut down their operations in Pakistan or sold them to local entities. Just last month, Careem announced it would discontinue its ride-hailing services in Pakistan starting July 18.

Mudassir Sheikha, CEO and co-founder of Careem, posted the update on LinkedIn, calling it an “incredibly difficult decision.”

“It is with a heavy heart that I share this update: Careem will suspend its ride-hailing service in Pakistan on July 18,” he wrote.

Careem Rides had entered the Pakistani market after Uber withdrew its services in 2015, filling a major gap in the ride-hailing space at the time.

With inputs from ANI