Pressured to relocate, Microsoft’s AI engineers in China must choose between homeland and career

Alan, a young engineer at Microsoft, has been living a comfortable life in Beijing working for the tech giant on cloud computing. He earns six times the average income in the city, allowing him to dine out frequently and take taxis whenever he wants.

But Microsoft is now asking Alan to start a new life across the Pacific. For the past two months, he’s been weighing up a request made to hundreds of Chinese employees who work on artificial intelligence and cloud computing to consider relocating to places including Canada, Australia, or Microsoft’s headquarters in Redmond, Washington.

Alan, who spoke under a pseudonym, received an offer to go to Vancouver, but he just couldn’t make up his mind. “No matter how comfortable Chinese people could be in Vancouver, it wouldn’t be as comfortable as Beijing,” he told Rest of World .

The past few weeks have been life-changing for the engineers, their families, and Microsoft’s China operations. The Silicon Valley tech giant, which opened its first China office in 1992, employs some 9,000 people in the country — most of whom work in research and development. Engineers in China have played key roles in advancing Microsoft’s AI technologies and providing infrastructure support to Azure cloud services. Their cutting-edge research, especially from the prestigious Microsoft Research Asia lab in Beijing, has become world-renowned.

But the kind of U.S.-China tech collaboration Microsoft once pioneered might be facing an end. The Biden administration has blocked China from accessing chips used to develop AI technologies, proposed restrictions on tech investments in China, and threatened bans on Chinese-owned platforms like TikTok. In Washington, Microsoft’s presence in China is increasingly viewed as a national security threat.

“Is it really worth operating in Communist China?” Rep. Carlos A. Giménez asked Microsoft president Brad Smith during a Congress grilling in June, citing Chinese laws that require citizens to cooperate with intelligence agencies. At the Homeland Security Committee hearing, Smith assured legislators that Microsoft was reducing its engineering teams in China. Most recently, it offered to relocate 700 to 800 people out of the country, he said. “They would need to move out of China in order to keep the job they have,” Smith said .

A Microsoft spokesperson told Rest of World in a statement that the transfer opportunities were optional. “Providing internal opportunities is a regular part of managing our global business,” the spokesperson said. “We remain committed to the region and will continue to operate in this and other markets where we have a presence.”

Rest of World spoke with 10 employees and engineers’ spouses, all of whom requested anonymity because they were not authorized to speak to the media. As the July deadlines for accepting the offers approached — the dates varied for different teams — they weighed everything from children’s education to dating prospects to immigration policies.

9,000 The number of Microsoft employees in China.

Partly thanks to government support on science and engineering education, China has produced a large number of global tech industry workers. Nearly half of the world’s top 20% AI researchers completed their undergraduate studies in China, according to a report on global AI talent published by think tank MacroPolo. Meanwhile, wages are lower in China than in the U.S. Software engineers in China are paid about a third of what their peers make in Silicon Valley, according to salary data site Levels.fyi .

Microsoft executives have cited China’s talent pool as the main reason for expansion in the country. In 2022, the company said it planned to increase the number of China-based staff to over 10,000. During a meeting with Smith in December last year, China’s commerce minister said he hoped Microsoft would play a constructive role in China-U.S. cooperation in AI and other areas. Microsoft has long advocated for open-source technology sharing , and Smith announced earlier this year that the company plans to make its AI tools more accessible to developers around the world.

But a growing distrust of China by U.S. politicians is making such collaboration, as well as the jobs of Chinese engineers, precarious. Despite China’s slowing economic growth and restricted freedoms, the tech giant’s high-earning Chinese staff are content with their life at home, where they enjoy cheap food, low crime rates, and child-care support from their parents. At the same time, they fear losing their Microsoft jobs if they refuse to relocate.

Employees were each offered a job at one of the destination countries. The headquarters in the U.S. proved to be the most sought-after destination, employees said, while Canada was unpopular due to lower pay levels for tech workers. It’s unclear how many people accepted offers to go to Ireland. Six employees estimated that fewer than half of the people who were offered relocation had accepted the offers.

“Emigration is not that appealing to many Microsoft people in China,” a Beijing-based employee told Rest of World , after declining an offer to relocate to Vancouver. “If you deduct taxes, every place except Seattle may come with a pay cut compared to Beijing. The living quality would really suffer.”

While Microsoft says it makes about 1.5% of its global sales revenue in China, research contributions from its Chinese engineers are far more valuable to the company, Jean-Marc Blanchard, executive director of California-based think tank Wong MNC Center, told Rest of World .

“It wasn’t just about accessing the China market, but also taking advantage of the talent,” said Blanchard, who has researched Microsoft’s China operations. “You have the individuals with their own scientific knowledge and technical expertise, but you also have them connected to venture capitalists, other firms and startups, and university researcher communities.”

Microsoft is facing a tremendous amount of pressure from the U.S. government and customers to reduce knowledge transfer to China, even though U.S.-China collaboration has helped the company grow its AI technologies, according to Samm Sacks, senior fellow at Yale Law School’s Paul Tsai China Center. “Now we’re in a moment where assumptions of globalization are overturned, and national security is seen as paramount,” he told Rest of World .

Internally, though Microsoft told employees it had no plans to lay off the people who declined to relocate, employees are worried about what would happen in the long term. “I’m not optimistic,” Alan said. “Our team has not hired in China for a long time.” Two other engineers said their teams had also reduced head count in China. One employee told Rest of World that China-based staff were excluded from team meetings that cover technologies considered sensitive in the U.S. The New York Times reported that Microsoft researchers in China were not allowed early access to OpenAI’s advanced chatbot GPT-4.

Employees said the work-life balance provided by American firms is a major perk of working at Microsoft. Employees are allowed to work from home and log off at 5 p.m. — a stark contrast to the cutthroat pace of the domestic internet industry. Under the infamous “996” routine , Chinese tech workers sometimes work 12 hours a day, six days a week. Age discrimination is prevalent: Those older than 35 are often considered too old for tech jobs.

Staff who agreed to relocate say favorable labor conditions at Microsoft, and in Western countries in general, contributed to their decision. “We are quite excited,” a Beijing-based engineer’s wife told Rest of World . “He doesn’t like the domestic work environment, and I just want to see what’s outside.” Although she will need to quit her own job as a teacher, she looks forward to taking a career break, seeing a platypus in Australia, and raising any future children outside of China’s grueling education system.

To others, the comforts of home and perceptions about safety were more important. Employees said they were concerned about the precarity of living under work visas — some staff discussed the possibility of a Donald Trump presidency that could lead to more anti-immigrant policies in the U.S., one employee said. Others told Rest of World they were worried about their spouses’ careers, caring for aging parents, and whether or not their children would adapt back to the Chinese education system after spending time abroad. “If we take our children abroad at such young ages, will they still have a strong bond with their motherland?” an engineer’s spouse told Rest of World . “What if they can’t speak Chinese that well?”

China’s strict Covid-19 lockdowns and economic hardship caused by the pandemic have led to a new wave of emigration , with some leaving the country through life-threatening routes . But to middle-class tech workers, the appeal of Western countries has diminished over the past decade, according to Tao Yu, an associate professor at the University of Western Australia who has studied Chinese politics and migration. “The West is no longer a beacon and a role model in terms of culture, political system, and social progress,” Tao told Rest of World , adding that higher inflation in Western countries, and foreign governments’ as well as ordinary people’s hostility towards China , put off potential emigrants.

“Our living quality would suffer a lot,” a Beijing-based engineer told Rest of World . He said most teammates had declined the relocation offers to Canada due to the higher costs of living and higher tax rates. Another engineer in Microsoft’s office in the eastern city of Suzhou said most colleagues had also turned down Vancouver offers.

For weeks, Alan agonized over the decision. He wanted to move abroad to work on AI projects free from restrictions on China-based staff and experience life in a freer society. But he worried about the high living costs in the West. Dating could also become difficult in a foreign country, he told Rest of World .

Alan deliberated with friends and colleagues. He reached out to a headhunter to ask about opportunities at other tech companies in China. The headhunter said that he wouldn’t easily find another job that comes with the same high salary and work-life balance. Alan eventually accepted the Vancouver offer.

Alan went through a physical exam required for the work visa application, booked a relocation service, and asked friends out for farewell meals. Microsoft employees say they have come to accept dwindling job security caused by volatile U.S.-China relations. “There is nothing we can do about the [political] situation,” Alan said. “But to some people, it could also be an opportunity.” ▰

Viola Zhou is a Rest of World Senior Reporter based in New York City.