Microsoft China’s Azure cloud business research and development team layoffs have been exposed. Several Chinese tech media outlets reported on June 5th and 6th that many Microsoft employees disclosed on social media that Microsoft China has initiated a new round of layoffs, mainly involving the Azure cloud business research and development team, affecting over 200 employees. The interviewees believe that this shatters the myth of the Chinese Communist Party’s stable foreign investment.
According to Xin Zhi Xun, Microsoft has informed relevant employees by email, requiring them to sign agreements by June 11th, with the final working day being July 6th. The compensation package this time can theoretically reach N+7, specifically N+4 basic compensation, plus a two-month signing bonus before June 11th, and a one-month resignation buffer period.
In a video circulating on WeChat’s video channel, a former Microsoft programmer and popular tech blogger known as “Yang Zi” stood in front of the Microsoft logo and stated that the company had held a meeting to announce the layoffs. He said, “Yesterday felt ominous, everyone was anxious, and today we were informed during the meeting – indeed, it is a massive layoff. They also announced this generous package of N+7. Everything happened suddenly, so let’s keep pushing forward. Adapt or perish.”
The reports also mentioned that Microsoft is offering internal transfer opportunities, where employees can choose to accept international rotation assignments, which may involve countries like the United States, Australia, Ireland, or opt for compensation upon resignation. Some Microsoft employees analyzed on social platforms that even if they choose international transfers, they may still face the risk of layoffs in the future, potentially reducing compensation.
Han Bin, a software engineer at a Jiangsu technology company, stated in an interview that many tech companies are shifting their core businesses out of China due to the technical requirements imposed by the Chinese Communist Party on foreign tech companies. He said, “In recent years, tech companies in China have been forced to give up their technology by the Chinese government in exchange for market access. How could others agree to that? If they hand over their technology to China and then get ousted in return, it’s better to withdraw from China.”
Han Bin noted that in the past two years, many multinational tech companies have downsized their operations in China due to technical security and policy risks. He added, “Many companies are not unwilling to do business in the Chinese market but are reluctant to give up their technology. If you don’t provide them with technology, they’ll come after you, saying you violated national security law, which is the perfect excuse. I heard that many Chinese executives of multinational companies from the United States, Japan, Sweden were summoned in China to provide technology, and they refused.”
A netizen commented in the forum, “Amazon also laid off employees. I worked there for 6 years and now I’m unemployed.” Another netizen replied, “Will never find such a good job again.” Some expressed sadness, saying, “Such companies will no longer exist.”
Azure is the core brand of Microsoft’s cloud computing business and a significant growth area for Microsoft globally in recent years. Professionals in the tech industry mention that Microsoft China was previously seen as a relatively stable choice for foreign enterprises in terms of research and development positions, with salaries, benefits, and layoff compensation higher than most Chinese internet companies. After the news of layoffs emerged, many professionals have begun to rethink the employment myth of the Chinese Communist Party’s “stabilizing foreign enterprises.”
On May 23, the Chinese Ministry of Commerce released data stating that from January to April of this year, China established 20,113 new foreign-invested enterprises, a 6.8% increase year-on-year; the actual use of foreign capital was 287.69 billion yuan, a 10.3% decrease year-on-year. Among them, the actual use of foreign capital in high-tech industries was 116.33 billion yuan, a 20.3% increase year-on-year, accounting for 40.4% of the country’s total actual use of foreign capital.
A scholar from Zhejiang, using the pseudonym Huang Sufang, told reporters that since the outbreak of the pandemic, a large number of multinational companies have been gradually withdrawing from China. The officially released so-called foreign investment data may likely involve a situation of “export substitution.” She said, “From what I see, the Chinese Communist Party has been emphasizing ‘stable foreign investment’ in recent years, even introducing a plan to stabilize foreign investment last year, claiming to relax market access for foreign investments and expanding pilot openings in telecommunications, healthcare, education, and other sectors. If the number of foreign investments does not decrease, they wouldn’t introduce these plans to retain foreign investments. Those capital outflows brought back to the country are also counted as foreign investment.”
Huang Sufang stated that mainland Chinese people have developed a judgmental approach after long-term observation of official policy language, where they tend to interpret official statements inversely. She believes that the more the authorities emphasize “stabilizing foreign investment,” the more it indicates increasing pressure from capital outflows; the more they talk about enlarging openness, the more it shows a lack of willingness for foreign capital to enter; and the more they promote a good business environment, the more it reveals corporations’ lack of confidence in policy security and institutional risks.