Microsoft exits Pakistan after 25 years amid global shift towards AI

After maintaining a presence in Pakistan for over two decades, global technology major Microsoft has formally shut down its operations in the country. The move follows a broader global workforce reduction by the company, which is shedding approximately 9,000 jobs as part of its strategic pivot towards artificial intelligence (AI) and operational streamlining.

The closure marks the end of a significant chapter for one of the world's most influential tech companies in Pakistan. Jawwad Rehman, the executive who established and led Microsoft Pakistan, confirmed the development via a LinkedIn post, writing, “Today, I learned that Microsoft is officially closing its operations in Pakistan. The last few remaining employees were formally informed and just like that, an era ends.”

Rehman termed the exit “more than a corporate exit”, indicating it reflects deeper structural and economic concerns. He pointed to the prevailing business environment in Pakistan, which, he suggested, had made it increasingly difficult for even established multinationals to operate. “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 remarked.

Microsoft had already moved key functions such as licensing and commercial contracting to its European hub in Ireland. Over the past few years, service delivery within Pakistan has been handled through a network of certified local partners. This partner-led model is expected to continue, even in the absence of a physical office presence.

Despite the optics of a formal withdrawal, the Ministry of Information Technology and Telecommunication downplayed the significance of the move.

In a press statement, the ministry said, “Pakistan’s Ministry of IT & Telecom recognises the strategic value of having leading global technology providers active in the country.” It added that Microsoft’s decision should not be viewed as an exit from the Pakistani market but as part of its long-term global strategy to consolidate operations and focus on a partner-led, cloud-first business model.

According to sources familiar with the matter, Microsoft had been operating in Pakistan with a scaled-down team in recent years. The remaining five employees were recently informed of their layoffs, aligning with the global reduction drive.

Microsoft’s global restructuring effort has seen multiple rounds of job cuts throughout 2025. As of its last reported headcount in June 2024, the company employed 228,000 full-time workers.

The latest round of layoffs, amounting to nearly 4 per cent of its workforce, follows the May announcement where approximately 6,000 positions were slashed—Microsoft’s largest job cut in over two years. In addition, several hundred employees were let go in June, including 300 based at the company’s headquarters in Redmond, Washington.

These measures are part of Microsoft’s broader strategy to refocus its resources on AI development and to simplify internal hierarchies by reducing management layers and realigning operational structures. The company has particularly targeted its sales division in the latest wave of cuts, with further layoffs anticipated in the coming weeks.

As Microsoft restructures its global operations to align with a rapidly evolving technology landscape, its quiet departure from Pakistan stands as both a strategic decision and a commentary on the challenges of sustaining multinational business in a complex and often volatile local economic climate.