Microsoft directs Azure software teams to cut costs by 20% amid AI spending
Microsoft’s Azure software development group, led by president Girish Bablani, has instructed its roughly 11,500 employees to propose ways to reduce expenses by at least 20%. The move aims to offset soaring capital expenditures on AI data centers and competitive salary pressures from rivals like Meta and Anthropic, according to The Information. No layoffs have been confirmed, but the report…
Key points
- Girish Bablani ordered Azure’s 11,500-person software team to propose 20% cost cuts to offset AI data center spending
- Azure revenue hit $101.9 billion in the year to June, up 40% year-over-year, but AI infrastructure costs are rising
- Microsoft restructures leadership under Arun Ulag to oversee Azure Core, including OpenAI’s cloud capacity
Azure’s revenue surged to $101.9 billion over the 12 months ending June, a 40% year-over-year increase, accounting for 31% of Microsoft’s total revenue. However, the rapid expansion of AI infrastructure has strained cash reserves, prompting discussions among cloud executives. Microsoft also announced an internal restructuring, elevating Arun Ulag to oversee key cloud units, including Azure Core, which serves clients like OpenAI. A Microsoft spokesperson denied directing cost-cutting plans, calling such preparations standard for market dynamics.
Microsoft Weighs 20% Cost Cuts In Azure Vertical Amid Soaring AI Data Center Spending: Report
stocktwits.com · 13 October 2026
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