Scott Guthrie, president of Microsoft’s cloud business, has directed leadership to identify strategic cost reductions of 20%. This request, issued on October 13, 2026, follows a series of efficiency measures implemented throughout the year.
The company previously initiated a hiring freeze in March 2026 across its cloud unit and North American sales groups. In July, Microsoft announced the reduction of approximately 4,800 roles, representing about 2.1% of its total workforce, with the Xbox division accounting for roughly 3,200 of those positions.
Microsoft has planned approximately $190 billion in capital expenditures for 2026, primarily focused on AI and data center infrastructure. In the third quarter of 2026 alone, the company committed to over $130 billion in new data center leases.
The firm continues to develop its proprietary Maia 200 AI chips, with plans to scale to multi-gigawatt deployments starting in 2027. Additionally, the company announced leadership changes within its Azure division around October 12 and 13, 2026, including an expanded role for Arun Ulag.
