Microsoft News: Another Round of layoffs

Microsoft is reportedly planning another major round of layoffs (about 9000 jobs!) in early July 2025, primarily targeting its global sales and marketing divisions. This follows a previous cut of 6,000 jobs in May, which mostly affected engineering and product teams.

Here’s a quick breakdown of what’s happening:

• Who’s affected: Thousands of roles, especially in sales, customer-facing teams, and middle management.
• Why now: Microsoft is doubling down on AI investments, with a record $80 billion budget for cloud infrastructure and AI development this fiscal year.
• Strategic shift: The company is outsourcing more sales functions to third-party firms and pushing employees to adopt internal AI tools like Copilot.
• Layoff pattern: This marks the fourth major workforce reduction since 2023, aligning with Microsoft’s fiscal year-end restructuring trend.

CEO Satya Nadella emphasized that these cuts are not performance-related but part of a broader realignment to support Microsoft’s AI-first future.

Microsoft announces sovereign solutions for European organizations

Microsoft has announced an expansion of its Sovereign Cloud solutions to better support European organizations with data privacy, compliance, and digital resilience. Here are the key highlights:

• Sovereign Public Cloud: Ensures all customer data stays in Europe, under European law, with operations handled by European personnel. No migration is needed for existing workloads.
• Sovereign Private Cloud: Supports critical workloads in hybrid or air-gapped environments using Azure Local and Microsoft 365 Local, offering enhanced control and business continuity.
• National Partner Clouds: In France and Germany, Microsoft partners with local entities (Bleu and Delos Cloud) to deliver trusted cloud services tailored to national regulations.
• New capabilities:
  • Data Guardian: For enhanced data protection in European operations.
  • External Key Management: Lets customers control their own encryption keys.
  • Regulated Environment Management: Simplifies compliance configurations.
  • Microsoft 365 Local: Brings productivity tools to private cloud environments.

Microsoft states that this move reflects Microsoft’s deepening commitment to European digital sovereignty, giving customers more choice, control, and compliance than ever before.

What do you think? My thoughts are that most these announcements (aside from the Partner Clouds) are nothing new under the sun. Microsoft has been at the forefront of Privacy & Security for EU based organizations for a while now, and this is just an effort at reducing the shifting mindshare in the EU.

Interested in this topic? Read our recent blog on Digital Independence for large organizations.

Product Terms Updates

Universal Licensing Terms

Update to Responsible Use of Microsoft AI Services. Microsoft provides starter templates, instructions, and code samples to help customers accelerate development with Microsoft AI Services, but customers are fully responsible for the apps or AI agents they create, including legal and compliance obligations. Additionally, third-party templates and samples offered through Microsoft are considered Non-Microsoft Products and governed by their own terms.

Dynamics 365

Language for Dynamics 365 removed under External Users to clarify that the External Users exemption does not apply to contractors or agents. Meaning you should have licenses for these users.

Power Platform

Updated Copilot Studio clause. This states that when you are using Grounding with Bing Search or Bing Custom Search in Microsoft Copilot Studio, their usage is governed by the Terms of Use and the Microsoft Privacy Statement. These features are optional and detailed in Copilot Studio’s product documentation. Importantly, the Data Protection Addendum (DPA) does not apply to these grounding services.

Other Updates: CSP

Several Cloud Solution Provider (CSP) promotions have been extended through FY26 Q1, ending September 30, 2025.

These include: a 15% discount on new Microsoft 365 Copilot subscriptions (10–2,400 seats) and Microsoft 365 E3/E5 annual term plans. These global offers support flexible additions, billing options, and customer eligibility for both new and existing users. Partners are encouraged to act now under the current flexible structure, ahead of a new Q2 promo framework, using updated resources like the Offer Landing Kit and Partner Services Blueprint to drive customer adoption and digital transformation.

Microsoft announce that the price increases for the Core CAL Suite (15%) and Enterprise CAL Suite (20%) will now take effect on 1 August, 2025 instead of 1 July, 2025 as originally announced.