MICROSOFT AXES CLAUDE CODE LICENSES TODAY ACROSS ENTIRE DIVISION — ENGINEERS USED IT TOO MUCH Today is the day Microsoft pulls the plug on Claude Code for thousands of its own engineers. The company is canceling the majority of internal Claude Code licenses across its Experiences and Devices division effective June 30, 2026. The reason will make you do a double take. Engineers used it too much. Monthly usage rates climbed to between 84 and 95 percent of the cap, and per-engineer API costs ran from $500 to $2,000 a month. That adds up fast at Microsoft’s scale. The company is steering its developers toward GitHub Copilot, Microsoft’s own in-house tool it has been pushing for years. The move is obviously financial, but it also carries a deeper embarrassment. Microsoft owns a major stake in OpenAI. It has invested billions in AI. Yet when given a choice, its own engineers preferred a competitor’s product so strongly that they blew the budget. Anthropic built something that Microsoft’s own workforce chose over the company’s flagship developer tool. The cancellation comes as the broader enterprise AI market faces a reckoning. Companies that burned through budgets fast and loose during the AI gold rush are now getting pressure from finance departments that want to see actual returns on the spend. Keywords: Microsoft Claude Code, AI spending cuts, GitHub Copilot, enterprise AI costs, Anthropic