Microsoft has officially shut down its office in Pakistan after a 25-year presence, laying off its remaining five employees and ending direct operations in the country.

The closure, confirmed by both Microsoft and former country head Jawad Rehman, marks a significant moment for Pakistan’s tech sector and has sparked widespread concern and reflection within the local business community.

The move is part of Microsoft’s broader global strategy, which involves a shift towards artificial intelligence (AI), Software-as-a-Service (SaaS), and cloud-based business models. This transition has led the company to reduce its physical presence in several countries and focus on serving clients through regional hubs and local partners.

Microsoft recently announced a 4% global workforce reduction, cutting nearly 9,000 jobs out of 228,000 employees worldwide, which affected the small Pakistan team as well.

Multiple sources, including former Microsoft executives and local experts, link the exit to Pakistan’s challenging economic environment, political instability, frequent changes in government, high taxes, currency fluctuations, and difficulties importing technology. These factors have undermined the country’s attractiveness for multinational corporations.

Unlike in markets like India, Microsoft never established a development or engineering base in Pakistan; its presence was limited to liaison and sales operations, with most licensing and contracts already managed from regional offices such as Ireland.

Microsoft’s official stance is that this is not an “exit” from the Pakistani market, but rather a shift to a partner-led, cloud-based service model. The company assured that Pakistani customers will continue to be served through local partners and regional offices, with no impact on service quality or existing agreements.

The move is seen by many as a symbolic blow to Pakistan’s tech and investment climate, raising concerns about the country’s ability to retain and attract global technology firms.

Former President Arif Alvi and other stakeholders described the closure as a “troubling sign” for Pakistan’s economic future, noting that instability had already caused Microsoft to reconsider expansion plans in favour of other countries like Vietnam.

Technology experts emphasise that the closure is part of a global trend as companies adopt SaaS models, making physical offices less essential, but also acknowledge it reflects deeper structural challenges in Pakistan’s business environment.

Microsoft’s departure follows similar moves by other multinationals, such as Careem, which have scaled back or ceased operations in Pakistan, further highlighting the difficulties faced by global firms in the local market.

Based On ANI Report