RHETORICAL QUESTION

Was the Microsoft Azure outage linked to recent layoffs?

By Dr. Tim Sandle
DIGITAL JOURNAL
August 12, 2024

Microsoft said it would train 250,000 people by 2027 to boost AI knowledge and competence and also increase capacity at its three data centres in Sweden. - Copyright AFP/File OLIVIER CHASSIGNOLE

On July 30, 2024, Microsoft faced a major outage affecting its Azure infrastructure and Microsoft 365 services. This outage significantly disrupted services for users globally, impacting businesses and individual users reliant on Microsoft’s cloud services.

The outage began at approximately 11:45 UTC and was reportedly resolved by 19:43 UTC, lasting almost eight hours.

While there have been other such outages over recent years, a specific report by Business Insider draws a potential causality relationship between two key events.

On June 3, 2024 Business Insider reports that Microsoft was laying off hundreds of employees from its Azure cloud unit. This decision was part of a broader restructuring effort aimed at improving operational efficiency and focusing on core business areas amid a challenging economic environment.

The layoffs affected various roles within the Azure division, reflecting Microsoft’s strategy to streamline operations and reallocate resources to more critical areas within the company.

This was not the first and it turned out not to be the last layoffs announcement by Microsoft in 2024. Currently Microsoft ranks 4th among the U.S. tech giants that laid off the most employees in 2024

Looking into these issues for Digital Journal is Paul Hoffman who undertakescompany stock research at BestBrokers.

Hoffman explains: “The layoffs in Microsoft’s Azure unit and the subsequent major outage may or may not have a causality relationship. However, such events highlight the delicate balance tech companies must maintain between cost-cutting measures, strategic allocation of resources and ensuring existing services’ reliability.”

Hoffman continues, noting the consequences: “While restructuring and layoffs can help companies reduce expenses and focus on strategic priorities, they can also lead to unintended consequences, such as diminished operational capacity and slower response times to technical issues.”

Returning to the official reason for the outage, Hoffman recounts: “Microsoft blamed the outage on a DDoS attack, which flooded the network with junk requests. But then, Microsoft’s own defensive measures amplified the attack, rather than mitigating it.”

This leads Hoffman to return to the matter at hand: “We cannot help but wonder if the outcome of the attack would have been the same if Microsoft hadn’t announced laying off hundreds of Azure staff 2 months prior.”