Microsoft reported strong Q2 FY2026 earnings, with revenue hitting $81.3 billion and Azure growth at 39%. However, the stock fell 11% due to capacity constraints and high customer concentration risk, particularly from OpenAI, which accounts for $281 billion of their commercial obligations.

Microsoft is laying off 3% of its workforce, approximately 6,000 employees, as part of organizational changes to adapt to a dynamic market. The layoffs, which include a significant reduction at the Redmond headquarters, are not performance-related and come despite the company reporting strong quarterly earnings. CEO Satya Nadella emphasized the need to adjust sales execution and management structures in response to shifting market demands.