Microsoft winds up Pakistan ops after 25 years; ex-president Arif Alvi blames regime change

The move comes as part of a wider global restructuring that includes laying off around 9,000 employees—roughly 4% of its global workforce.

While the company is exiting the country, it said services to customers would remain unaffected. "As a part of regular process of business evaluation and optimization, we are changing our operating model in Pakistan," a Microsoft spokesperson told theregister.com.

"Our customer agreements and service will not be affected by this change. We will serve our customers through both our strong and extensive partner organization, and other closely located Microsoft offices," the spokesperson added.

The layoffs, confirmed on July 2, are the third round of job cuts at Microsoft this year. The company had earlier announced 6,000 layoffs in May and over 300 more shortly after.

The restructuring is part of Microsoft’s ongoing strategy to reallocate resources as it ramps up investments in artificial intelligence. Teams across various verticals, including sales and Xbox, are among those impacted.

Alvi links Microsoft exit to lost investment opportunity

Reacting to the tech giant’s departure, Pakistan’s former president Arif Alvi described the development as a troubling sign for the country’s economic outlook.

“Pakistan now spirals in a whirlpool of uncertainty. There is increasing joblessness, our talent is migrating abroad, purchasing power has reduced, economic recovery in the ‘awami’ context feels like a distant & elusive dream,” Alvi posted on X.

He also reflected on a missed opportunity, recalling how Microsoft’s expansion plans in Pakistan were derailed following the 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 contributions to polio eradication in our country,” Alvi said.

‘All set’ plans that never materialised

Alvi recounted a conversation he had with Gates during the visit. “During our discussion, I asked him directly, ‘Why isn’t Microsoft investing in Pakistan?’ He leaned in, sharing in confidence that he had just spoken with PM Imran Khan and arranged a call between the PM and Microsoft CEO Satya Nadella. In a hushed tone, he asked me to keep it quiet, revealing that ‘all is set and within two months, the PM and I will announce a major Microsoft investment in Pakistan,’” he said.

However, he added, “But then, everything went rapidly downhill. Regime change upended those plans, and the promise of investment slipped away. By October 2022, Microsoft chose Vietnam for its expansion, a decision in which they had initially favored Pakistan. The opportunity was lost.”

Alvi stressed that Pakistan's only way forward lies in constructive political engagement. “Public opinion, as many know, reflects deep disillusionment with the current arrangement & the electoral process. Yet, a vast majority still believes that dialogue is the only way to navigate this crisis,” he said.

Microsoft Pakistan head confirms exit

Jawwad Rehman, who set up and led Microsoft’s Pakistan operations, confirmed the company’s withdrawal in a LinkedIn post.

While the full operational wind-down details are yet to be made public, Microsoft has indicated that its services in the country will now be managed via its partner network and nearby offices.