Microsoft offers to relocate nearly 10% of China-based staffers to the US or allied nations — AI and cloud engineering exodus from China begins

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Microsoft is asking nearly 10% of its China-based workforce to move to the U.S., Ireland, Australia, or New Zealand. According to Reuters, most affected workers are Chinese engineers working in the company’s machine learning and cloud computing divisions — key battlegrounds that the U.S. and China are vying for in their bid to gain technological supremacy.

This announcement came soon after the White House’s press release announcing increased tariffs on high-tech Chinese goods and can be seen as Microsoft’s reaction to keep the U.S. government happy. However, a Microsoft spokesperson said in an emailed statement to Reuters that this was just a routine business move.

“Providing internal opportunities is a regular part of managing our global business. As part of this process, we shared an optional internal transfer opportunity with a subset of employees,” Microsoft said in its email. The spokesperson also added that “Microsoft remains committed to China and will continue to operate there and other markets.”

Although the company did not confirm how many employees received the transfer opportunity, internal sources say it affects 700 to 800 people. This is a substantial number of Microsoft’s China-based workforce. The Global Times reported in 2022 that Microsoft already had more than 9,000 full-time workers and was expected to hire over a thousand more in the following year.

There is no telling how many offers will be accepted, especially as this is optional for the employees. But even if a small number only accepts Microsoft’s proposal, this is a potential brain drain of China’s top talent, especially given their highly niche specialties. After all, many former Microsoft employees eventually became leaders in top Chinese tech firms, including Baidu and TikTok-owner ByteDance.

Microsoft’s heavy presence in China has invited scrutiny from American lawmakers. In a March 2024 letter to U.S. Commerce Secretary Gina Raimondo, U.S. Representative Pat Fallon said, “What we seek to understand is if and how Microsoft’s broad usage across the U.S. federal government, close ties to [the People’s Republic of China]’s government and compliance with intrusive PRC laws threatens U.S. national and economic security.”

He then adds, “No U.S. company should be playing a role in supporting the Chinese government. It is critical that any such efforts be stopped, and that broader Chinese operations be carefully scrutinized.” (via the New York Post)

We cannot confirm whether the transfer offer is indeed a routine business decision or a move designed to keep American pressure off Microsoft’s China operations. However, with the emails coming so soon after the White House’s recent moves to up the ante in the Sino-American chip war, we cannot help but feel that Microsoft is taking steps to slowly move away from China and avoid U.S. sanctions.

Freelance News Writer
  • slightnitpick
    But even if a small number only accepts Microsoft’s proposal, this is a potential brain drain of China’s top talent, especially given their highly niche specialties. After all, many former Microsoft employees eventually became leaders in top Chinese tech firms, including Baidu and TikTok-owner ByteDance.
    Eh. They can always move back to China after gaining experience in another country.
    Reply
  • peachpuff
    slightnitpick said:
    Eh. They can always move back to China after gaining experience in another country.
    And take some ip with them...
    Reply
  • bit_user
    Not that I want to add to the paranoia in this thread, but I'm pretty sure there are documented cases of Chinese tech employees, based in the US, being pressured, bribed, or even extorted to leak IP when they travel home to visit their friends & family. If you've never traveled internationally, it's common for them to inquire about your occupation, when going through customs. This would be the perfect place for you to get flagged and taken aside for further questioning.

    To the extent this really does happen, companies need to look for signs. However, the only way it can be truly solved is on a government-to-government level.
    Reply
  • eye4bear
    Besides, Microsoft has a bunch of empty work-stations from all the recently laid off staff there,
    Reply
  • STIPS
    Who's going to approve the move? Why the hell is MS utilizing a developer base in a Communist country - why don't they just run a fiber optic link direct to State Security Ministry Chen Yixin super computers, save having to pay all the Chinese agents? Thank Bill Gates (and all the other West's new age billionaires) for jeopardizing the West ----- "Communism's useful idiots"
    Reply
  • pug_s
    bit_user said:
    Not that I want to add to the paranoia in this thread, but I'm pretty sure there are documented cases of Chinese tech employees, based in the US, being pressured, bribed, or even extorted to leak IP when they travel home to visit their friends & family. If you've never traveled internationally, it's common for them to inquire about your occupation, when going through customs. This would be the perfect place for you to get flagged and taken aside for further questioning.

    To the extent this really does happen, companies need to look for signs. However, the only way it can be truly solved is on a government-to-government level.
    This is a whole bunch of BS. These Chinese employees are already working internally in Ai and cloud division having access to their IP and can easily 'steal' it so they don't have to be out of their country to do it. Second, even these Chinese employees leaves China to the west, these employees will be seen as a 'threat' to other employees in Microsoft and won't get the upward mobility compared to employees in the west. Besides, these Chinese employees will probably get an H1B visa like visa and will get paid much less compared to their western counterparts. One employee in Microsoft in China who got this notice is confused why this person got it. I wouldn't expect the majority of employees taking offers anyways.
    Reply
  • bit_user
    pug_s said:
    This is a whole bunch of BS. These Chinese employees are already working internally in Ai and cloud division having access to their IP and can easily 'steal' it so they don't have to be out of their country to do it.
    My point was about coercion by the State. For a Chinese employee who's sitting in China, there's not the same interaction with the State as if you're going through customs.

    pug_s said:
    Second, even these Chinese employees leaves China to the west, these employees will be seen as a 'threat' to other employees in Microsoft and won't get the upward mobility compared to employees in the west.
    I never worked at Microsoft, but as long as someone has excellent spoken and written English, I doubt they will face undue impediments in their corporate advancement.

    The language aspect is a big one. My advice to anyone intent on corporate advancement in a foreign country would be total cultural immersion. These days, you can live in another country but still consume all news & media in your native language, surround yourself with other ex-pats, and have very few points of contact with the culture of your host country.

    I used to work with a guy who, as far as I could tell, only used English outside the workplace when he had to deal with school & healthcare for his kids. Another one of my former co-workers came to the US at about the same age (i.e. for grad school), but seemed almost more American than many people who've lived their whole lives here and I honestly don't think that was an act or driven by any sort of insecurity. He sincerely gravitated towards US culture as a kid and we shared many of the same interests and cultural reference points. I'm pretty sure his primary and secondary schooling was all in his native language (I mention this, because I believe some of the more elite schools in India use English as the primary language).

    pug_s said:
    Besides, these Chinese employees will probably get an H1B visa like visa and will get paid much less compared to their western counterparts.
    The H1B program forbids employers from paying recipients less, precisely as a disincentive to abuse the program for this purpose. Furthermore, they're required to publicly post details about the positions filled by these visa holders, so other employees can actually see there's no pay differential. In several cases, I've seen these postings where they made bigger salaries than I was receiving!
    Reply