Shanghai Wicresoft, Microsot's joint venture in China, will stop operations in China, resulting in the layoff of about 2,000 employees, Reuters reported Monday, citing local media.

The move comes as Microsoft has decided to cease outsourcing after-sales support in China to Wicresoft amid escalating political and trade tensions between China and the US, according to the report.

Wicresoft was founded in 2002 as Microsoft's first joint venture company in China. The 10,000-strong company also operates in the US, Europe and Japan, the report said.

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