June 4, 2024 Microsoft is cutting hundreds of jobs from its Azure cloud business, according to sources familiar with the situation. The layoffs impact teams within Azure for Operators and Mission Engineering.

One source estimated that the Azure for Operators team alone faced up to 1,500 job cuts. These teams are part of the Strategic Missions and Technologies (SMT) organization, which was established in 2021. Led by former Azure boss Jason Zander, SMT focuses on cutting-edge initiatives such as quantum computing, space projects, and Microsoft’s government cloud business.

These layoffs come as part of Microsoft’s routine workforce adjustments, typically made around the transition to a new fiscal year after June 30. However, the frequency and scale of layoffs have increased, following the company’s plan announced last year to cut 10,000 jobs within the first few months of 2023.

The SMT organization was created to house Microsoft moonshots and advanced projects, but the company’s partnership with OpenAI and its leadership in generative AI have shifted strategic priorities. Despite these advancements, workforce reductions in other areas reflect broader trends in the tech industry, where layoffs have become more common.

As Microsoft continues to innovate and shift its strategic focus, workforce adjustments remain a part of its operational changes. The layoffs in the Azure cloud business, particularly within the SMT organization, signify the company’s evolving priorities in a competitive tech landscape.