(ECNS) -- An internal email circulated online on Monday stated that Wicresoft, Microsoft's first China-based joint venture, will halt operations in the country and lay off around 2,000 employees, as U.S.-China political and trade tensions escalate, according to media reports.
The email stated that Microsoft, citing "geopolitical shifts and changes in the international business environment," is adjusting its global strategy, which will result in Wicresoft "officially ceasing operations in China" starting Tuesday, Beijing-based magazine Caijing reported.
It also said the decision would halt Microsoft-related projects in China, with the company shifting focus to expanding operations in Vietnam, Japan, Hungary, and other Eurasian markets.
A staff member from Wicresoft's Shanghai AI team told Yicai, "All employees working on Microsoft projects received the email."
South China Morning Post last month said Microsoft China had closed a Shanghai lab focused on the Internet of Things (IoT) and AI development.
Reuters reported that the tech giant is scaling back in China amid fierce competition from local rivals like Kingsoft. It said that Microsoft's retreat reflects the political and trade tensions between China and the U.S.
Microsoft China issued a statement on Monday, denying reports that it was "halting operations in China," but it did not directly address Wicresoft's mass layoffs.
Established in 2002, Wicresoft mainly engages in software and information technology services.
(By Zhang Dongfang)
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