Microsoft is reportedly set to lay off hundreds of employees from its Azure cloud division.

According to sources cited by Business Insider, the cuts are expected to impact teams including Azure for Operators and Mission Engineering, with one source estimating as many as 1,500 potential job losses in Azure for Operators alone.

The affected teams fall under the Strategic Missions and Technologies (SMT) organisation, established in 2021. Led by former Azure head Jason Zander, SMT houses cutting-edge projects like quantum computing and space initiatives alongside its government cloud business. This focus on next-generation technologies reflects Microsoft's ambition to stay ahead of the curve in the rapidly evolving cloud computing landscape.

However, the decision to lay off employees comes amidst a period of significant growth for Microsoft's generative AI capabilities, spearheaded by its successful partnership with OpenAI.

While some might speculate the cuts might be a way to redirect resources towards AI development, others suggest it could be a cost-saving measure in a broader economic climate.

The layoffs are not entirely unexpected, with Microsoft often conducting workforce reductions around this time as it approaches the end of its fiscal year.

Elsewhere, CNBC has reported that Alphabet-owned Google has cut around 100 staff from its Cloud unit. The report notes that the eliminated roles were mostly in sales, consulting, "go to market" strategy, operations and engineering.

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