Microsoft Azure Executive Asks Teams to Find 20% Cost Cuts, Report Says
October 14, 2026 - 10:50 am
Credit: Salah Darwish on Unsplash
A senior Microsoft cloud boss has requested team leaders to identify methods to reduce costs by at least 20%, according to a report by The Information, citing sources familiar with the matter.
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."
According to the report, the request originated from Girish Bablani, who oversees the Azure group responsible for building software for Microsoft’s cloud servers. This group employs approximately 11,500 people, as reported by Stocktwits.
The savings are intended to support Microsoft’s significant investments in AI data centers and to fund higher compensation to retain talent sought after by competitors like Meta and Anthropic.
While specific measures are still under discussion, potential cuts could include ending deals with external contractors. The report does not indicate whether job cuts are anticipated. Microsoft’s last round of significant layoffs occurred in July 2025, when approximately 9,000 positions were eliminated.
Earlier this week, The Information also reported that cloud chief Scott Guthrie is reshaping Azure’s leadership. Under this plan, Arun Ulag will oversee Bablani and other top leaders, including Azure’s technology chief Mark Russinovich and security head Charlie Bell. Ulag will also lead Azure Core, responsible for selling computing power to companies like OpenAI.
Microsoft has been aggressively investing in AI capabilities. On Monday, it announced that its own Maia chips will become the primary system for running its AI services starting in 2027. The company plans to share more details at its upcoming Ignite conference.
In September, Microsoft also began separating Azure’s revenue reporting for the first time. The cloud business generated $29.4 billion in the June quarter, representing a 42% year-over-year increase.
By:
Alina Maria Stan