Microsoft closing Humacao manufacturing plant by ’24
Microsoft Corp. will be shuttering its only wholly owned manufacturing facility in the world, located in Humacao, in 2024, leaving 78 employees jobless, Department of Economic Development and Commerce Secretary Manuel Cidre confirmed.
Microsoft Operations Puerto Rico in Humacao has been doing business there since 1989. At present, it is occupying a building owned by the Puerto Rico Industrial Development Company, which will be vacated and the DDEC will be looking for a new tenant, he said.
“Microsoft plans to wind down activities and decommission its Humacao facility in Puerto Rico. Decommissioning the site will be a multi-year journey and even after the completion, Microsoft will continue to have sales and support personnel in Puerto Rico to support our customers. There is no immediate change to employee roles at the Humacao facility,” the company said in a statement sent to News is my Business.
Humacao Mayor Reinaldo Vargas — who allegedly made the announcement ahead of the company — told media outlet Foro Noticioso that Microsoft’s exit would mean a loss of annual municipal taxes of about $10 million.
The company’s exit will also represent $300 million less in revenue for the central government, payable under Law 154, which applies a 4% corporate tax on foreign companies.
Cidre said Microsoft’s move is a business decision based on an ongoing shift on to cloud-based services.
“Despite the different efforts that were carried out in the DDEC to keep the company on the island, the reorganization responds to a change in its global business model in which digital and database services cannot be located in a single geographic physical location,” said Cidre.
“In addition, this decision responds to financial aspects and risks to climatic elements, among others. Microsoft Operations Puerto Rico, LLC has confirmed its commitment to its Puerto Rican employees and the efforts that will be carried out in the Humacao operations,” said Cidre.
Microsoft Operations Puerto Rico, LLC announced that it will maintain a remote workforce in Puerto Rico and the other employees will be relocated in the different offices it has globally.