A senior Microsoft cloud boss has asked team leaders to find ways to cut costs by at least 20%, The Information reported, citing people who know about the plans.
We have not independently verified the report, and Microsoft disputes it.
“Azure leadership has not directed teams to develop cost-cutting plans,” a Microsoft spokesperson told The Information.
“Every responsible company prepares for a range of scenarios and market dynamics, both positive and negative,” the spokesperson added.
According to the report, the request came from Girish Bablani, who runs the Azure group that builds software for Microsoft’s cloud servers. The group has about 11,500 staff, Stocktwits reported, citing The Information.
The savings would help pay for Microsoft’s heavy spending on AI data centres, the report said. They would also fund higher pay to retain staff being courted by rivals such as Meta and Anthropic.
The exact steps are still being discussed, and could include ending deals with outside contractors. The report did not say whether jobs would go. Microsoft last made deep cuts in July 2025, when it laid off about 9,000 people.
Earlier this week, The Information also reported that cloud chief Scott Guthrie is reshaping Azure’s leadership.
Under that plan, Arun Ulag will oversee Bablani and other top leaders, such as Azure’s tech chief Mark Russinovich and security head Charlie Bell. Ulag will also run Azure Core, which sells computing power to firms including OpenAI.
Microsoft has been spending heavily to build up AI capacity. On Monday, it said its own Maia chips would become the main system for running its AI services from 2027. It plans to share more at its Ignite conference next month.
In September, it also began reporting Azure’s revenue separately for the first time. The cloud business brought in $29.4 billion in the June quarter, up 42% year over year.
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