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.”