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Microsoft is laying off hundreds of employees at its Azure cloud unit in China as the US technology giant navigates tightening data regulations in both Washington and Beijing, according to several of its employees.
The move marks at least the third round of downsizing in the country by the company in two years.
Five people affected by the move said that some Azure staff in Beijing and Shanghai received an email last week informing them their roles would be terminated. The people requested anonymity because they were not authorised to speak to the media.
Two sources estimated the lay-offs would impact between 200 and 400 workers, who would cease employment at Azure on July 6 and receive severance packages based on their tenure, plus up to seven months’ pay. They said some staff were offered an option to relocate to Canada.
Other Microsoft units – including its DevDiv developer division, Microsoft Software Technology Centre Asia and Microsoft AI teams across Shanghai and Suzhou – remain unaffected.
“As part of managing our global business, we shared an optional internal transfer opportunity with eligible employees,” a Microsoft representative said in an email to the SCMP.
“We remain focused on serving customers and growing our business globally.”

The lay-offs are the latest in a series of downsizing moves by Microsoft’s China division. In October, the company cut jobs on the Azure team while offering some staff relocation opportunities to Australia, according to mainland Chinese media reports at the time.
In 2024, Microsoft offered its China-based artificial intelligence and Azure employees the option to move to overseas locations, including the US, Australia and Ireland. At the time, the company said it would remain committed to China and would continue operating in the market.
This followed a move in 2023 to relocate some of the company’s top China-based AI researchers to a new laboratory in Vancouver, Canada, as reported by the Financial Times. Microsoft confirmed at the time that it would pull talent from its offices across the globe for the new facility, including those from China.
Beyond its cloud and AI units, Microsoft has also scaled back its physical retail presence in the country. The company closed its authorised bricks-and-mortar stores in mainland China in 2024, shifting entirely to online sales and select third-party retail partners.
The ongoing restructuring comes as Washington and Beijing ramp up oversight of cross-border data flows. Last year, the US Department of Justice implemented its Data Security Programme, which restricts American organisations from sending some datasets to employees, vendors and investors in “countries of concern”, including China.
Meanwhile, Beijing has steadily tightened its own data governance framework, having introduced the Data Security Law and the Personal Information Protection Law in 2021.
Additional reporting by Minxiao Chang


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The firm is laying off some employees at its cloud unit amid ongoing restrictions on cross-border data flows between the two countries


The firm is laying off some employees at its cloud unit amid ongoing restrictions on cross-border data flows between the two countries.


Microsoft cuts hundreds of cloud jobs on mainland, as China, US tighten data laws: sources

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}The firm is laying off some employees at its cloud unit amid ongoing restrictions on cross-border data flows between the two countries

The firm is laying off some employees at its cloud unit amid ongoing restrictions on cross-border data flows between the two countries