Girish Bablani, who heads Microsoft’s Azure group, has asked senior leaders to come up with ways to cut costs by at least 20%, the tech news site The Information reported on 13 October 2026, citing a person with direct knowledge of the matter.
Microsoft disputes that account. A Microsoft spokesperson told The Information: “Azure leadership has not directed teams to develop cost-cutting plans. Every responsible company prepares for a range of scenarios and market dynamics, both positive and negative.”
What was reported
The Information’s report is behind a paywall. Its details were relayed by the financial news services TheFly, on Markets Insider, and Stocktwits, on Yahoo Finance.
According to those accounts, Bablani told leaders in his unit to come up with cost-saving ideas. The Azure group he runs, which builds the software behind Microsoft’s cloud servers, has roughly 11,500 employees, The Information reported.
The report said the exact measures were still being considered and could include ending work with outside contractors. It did not say any plan had been agreed.
Azure is Microsoft’s cloud computing business, which rents out computing power and storage to companies over the internet. It is also where Microsoft is spending heavily to build data centres for artificial intelligence.
A leadership change too
The Information also reported that Scott Guthrie, who leads Microsoft’s cloud and AI business, announced internally on Monday that senior executive Arun Ulag will take on broader oversight across the cloud organisation, including Azure Core, the part that supplies raw computing capacity to large customers.
What is not known
- whether any cuts will actually be made;
- which costs would be targeted; and
- how Microsoft squares the reported request with its statement that no teams have been told to draw up cost-cutting plans.
What this means
- Microsoft and the report disagree. The Information says leaders were asked to find savings; Microsoft says Azure leadership has not directed teams to plan cuts.
- AI spending is putting pressure on costs. Big cloud companies are under pressure to fund huge AI investments.
- This rests on one source. The Information cited a single person with direct knowledge.
Sources
- The Information (Kevin McLaughlin and Aaron Holmes), “Microsoft Explores Ways to Cut Costs in Azure Cloud Unit”, 13 October 2026. https://www.theinformation.com/briefings/microsoft-explores-ways-cut-costs-azure-cloud-unit
- TheFly via Markets Insider, “Microsoft Cloud president asks managers to lower costs by 20%, Information says”, 13 October 2026. https://markets.businessinsider.com/news/stocks/microsoft-cloud-president-asks-managers-to-lower-costs-by-20-information-says-1036623156
- Stocktwits via Yahoo Finance, “Microsoft Weighs 20% Cost Cuts In Azure Vertical Amid Soaring AI Data Center Spending: Report”, 13 October 2026. https://finance.yahoo.com/technology/ai/articles/microsoft-weighs-20-cost-cuts-234048608.html
