Pakistan: Microsoft has formally discontinued its on-ground business in Pakistan following a 25-year tenure during which it had produced enterprise sales and regional involvement. The company has confirmed that it would now only work with the customers in Pakistan through the regional offices and the certified resellers only after a universal shift towards the partner oriented, cloud based services.
A spokesperson of Microsoft stressed that “No change will impact customer agreement, service” and that in other countries this model has already been successful. It is a small shop and this affects only five local workers who concentrated more on the market of Azure and Office. The company already had switched its licensing and commercial contract operations to its European headquarters in Ireland over the previous years with no existing engineering or development teams located in Pakistan. This will now be facilitated through existing partners on the ground to provide day to day service delivery.
According to the Ministry of Information Technology in Pakistan, the move is in line with what Microsoft calls a “workforce optimization program” which is a part of the global downsizing and restructuring exercise in which the company has shed off around 4 percent (nearly 9,000) of its workforce. The ministry further said that this is not a market exit, but consolidation of its liaison office to be more efficient by using local partners.
It is not an attractive figure in terms of headcount but those in the industry are concerned with the way Pakistan is promoting itself among technology companies worldwide. Jawwad Rehman, a former Microsoft Pakistan director, termed the closure a wake-up call to the fact that the country has created an environment that might not be sustainable anymore, even by multinational giants like Microsoft. He highlighted that political instability, soft policies and macroeconomic uncertainty have hampered the initiatives by global giants as Bill Gates and Satya Nadella to make further investment.
Another former President Arif Alvi made the same sentiment, citing the lost opportunities (Microsoft choosing Vietnam instead of Pakistan due to change of its government in 2022) and stating that this economic crisis and the high profile resignations negatively worsen the already rising brain drain.
According to the financial experts, that is only approximately 0.018 percent of the worldwide revenue Microsoft receives, and in financial terms it does not amount to much, but the symbolic value has a huge weight. Critics say this step will discourage future investments in technologies in the country.
Nevertheless, other observers feel this is the right moment given how Microsoft has turned its interest to cloud-first SaaS in the rest of the world. With the increased pace of digital transformation, Microsoft has centralized licensing, support roles through Ireland and they have minimized the use of the local teams to handle their transactional and licensing-related activities. Certified partners will go on with customer-facing activities, and the ministry has pledged to sustain positive interaction with the Microsoft leadership.
In response, Pakistani tech professionals gave mixed responses on social media. One of the PakistaniTech Reddit users pointed to the strength of local engineers:
“In spite of the challenges, our developers, freelancers as well are doing an amazing thing.”
Nevertheless, the exit is already considered by many as a lesson to be learned, highlighting structural problems instead, including patchy internet coverage, poor infrastructure, and the small business-friendliness compared to such regional rivals as India or Vietnam.
To quell the concerns, Pakistan IT Ministry called top-level meetings with promises that policy change, investor engagement, and update to the digital infrastructure is in progress. This resolution has been prompted by big national programs such as the declaration to certify 500,000 young people in information technology skills, which have been criticized as being empty unless there is the related advancement of governance and economical stability.
After all, Microsoft leaving a 25 year old relationship is all about bigger things in terms of investment in the age of the digital world. The further the multinational tech companies commit to the cloud-first strategy, the more switching country-specific factors are identification criteria of international interaction: country political stability, its regulatory predictability, and even its infrastructure resilience. The same applies to Pakistan: this episode can be seen as a wake-up call: unless there is a systemic change, digital aspirations cannot equate into a viable pillar of economic growth in Pakistan.
In response, Pakistani tech professionals gave mixed responses on social media. One of the r/PakistaniTech Reddit users pointed to the strength of local engineers:
“In spite of the challenges, our developers, freelancers as well are doing an amazing thing.”
Nevertheless, the exit is already considered by many as a lesson to be learned, highlighting structural problems instead, including patchy internet coverage, poor infrastructure, and the small business-friendliness compared to such regional rivals as India or Vietnam.
To quell the concerns, Pakistan IT Ministry called top-level meetings with promises that policy change, investor engagement, and update to the digital infrastructure is in progress. This resolution has been prompted by big national programs such as the declaration to certify 500,000 young people in information technology skills, which have been criticized as being empty unless there is the related advancement of governance and economical stability.
After all, Microsoft leaving a 25 year old relationship is all about bigger things in terms of investment in the age of the digital world. The further the multinational tech companies commit to the cloud-first strategy, the more switching country-specific factors are identification criteria of international interaction: country political stability, its regulatory predictability, and even its infrastructure resilience. The same applies to Pakistan: this episode can be seen as a wake-up call: unless there is a systemic change, digital aspirations cannot equate into a viable pillar of economic growth in Pakistan.
