Microsoft’s venture Wicresoft is set to stop its operations in China and lay off employees, according to reports.

According to a report by Chinese media Caijing on Monday, Microsoft’s  joint venture Wicresoft will halt its operations in China starting Tuesday, resulting in approximately 2,000 job cuts.

The action aligns with Microsoft’s choice to end outsourcing after-sales support in China to Wicresoft, as per Caijing, leading to concerns regarding how the U.S. tech company will support China-based users of its Windows and Office software.

The report indicated that the shutdown would result in job losses primarily affecting the 2,000-member Microsoft outsourcing team in China.

Microsoft is retreating from the China market due to increasing political and trade tensions between Washington and Beijing, along with strong competition from Chinese competitors such as Kingsoft.

Founded in 2002, Shanghai Wicresoft Co. Ltd. is Microsoft’s inaugural joint venture in China and offers IT services globally, including in the United States, Europe, and Japan, boasting a workforce exceeding 10,000, according to Wicresoft’s website.

Earlier this year, Microsoft shut down a Shanghai laboratory concentrating on the development of Internet of Things and artificial intelligence technologies, as reported by the South China Morning Post last month.

A screenshot of a private email shared on Chinese social media on Monday revealed that Microsoft was ceasing its operations in China. A spokesperson for Microsoft informed  that this was incorrect, while Caijing stated it pertained to Wicresoft.