Microsoft shuts Pakistan operations after 25 years amid political and economical turmoil

Microsoft has officially ended its operations in Pakistan, marking the close of a 25-year presence that began in March 2000. The move, which was not accompanied by a formal announcement from the tech giant, has been confirmed by Jawwad Rehman, the executive who first established Microsoft’s presence in the country.

“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 shared in a LinkedIn post, signalling the end of a chapter that saw the company contribute significantly to Pakistan’s digital landscape.

Exit Linked to Economic Instability

While Microsoft has not publicly stated its reasons for the closure, the decision is widely attributed to Pakistan’s deteriorating political and economic climate. Analysts point to frequent regime changes, heavy taxation, currency volatility, and growing challenges in importing technology as key deterrents for global firms.

The economic indicators paint a grim picture: by the end of FY2024, Pakistan’s trade deficit had climbed to USD 24.4 billion, while foreign exchange reserves dropped to just USD 11.5 billion by June 2025, a situation that has directly impacted the country’s ability to support tech imports and retain investor confidence.

Former President Alvi Blames Political Upheaval

Reacting to the development, former President Dr. Arif Alvi described Microsoft’s exit as a “troubling sign” for the country’s economic future. In a detailed post on social media platform X, Alvi lamented the growing joblessness, brain drain, and the erosion of purchasing power in Pakistan.

“Pakistan now spirals into a whirlpool of uncertainty. Economic recovery in the ‘awami’ context feels like a distant & elusive dream,” Alvi said.

The former president also revisited a key moment in 2022 when Microsoft co-founder Bill Gates visited his office. Alvi recalled a confidential conversation during which Gates revealed that he had arranged a call between then Prime Minister Imran Khan and Microsoft CEO Satya Nadella to discuss a major investment in Pakistan.

“Bill Gates told me that ‘all is set and within two months, the PM and I will announce a major Microsoft investment in Pakistan’,” Alvi wrote. But according to him, regime change derailed those plans. “By October 2022, Microsoft chose Vietnam for its expansion — a decision in which they had initially favoured Pakistan. The opportunity was lost.”

A Legacy of Digital Empowerment

Over the past two decades, Microsoft played a pivotal role in shaping Pakistan’s technology ecosystem. It partnered with educational institutions, introduced computer labs in underserved areas, and supported digital literacy and entrepreneurship across the country.

“We tried to give Pakistani youth a real shot at opportunity,” said Jawwad Rehman, reflecting on the company’s broader social impact.

As Microsoft departs, concerns mount over Pakistan’s ability to retain and attract multinational technology firms in the face of ongoing uncertainty. For many, the company’s exit represents not just a corporate retreat, but a broader indictment of the country’s fragile economic and political environment.