Microsoft 365: Teams out of office, Outlook grim; co reroutes traffic as it works on recovery

Mumbai | New Delhi: Microsoft was swamped by a global outage, disrupting communications across sectors, forcing institutions and organisations to adopt alternative channels in a hurry to ensure continuity of critical operations as even routine email on the US tech giant’s networks froze.

The stock crashed as much as 2.5% in early Friday US trade, wiping out about $100 billion in market value, before recouping some losses.

The blackout began late Thursday, taking out Microsoft’s Outlook and Exchange Online services, shutting users in several countries out of their mailboxes, rendering them incapable of sending or receiving email. Also hit was Microsoft’s much-touted Copilot AI assistant.


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The biggest India impact was seen in the banking sector with day-to-day communications at lenders and non-banking financial companies (NBFCs) being affected. The disruption tested business-continuity arrangements across financial institutions, impeding email-based communication, client servicing and internal coordination.

The disruption, which has lasted over 24 hours, comes amid turmoil in the AI ecosystem that includes Jensen Huang being forced to resign from Nvidia, causing its stock to tumble, as well as the pushback against data centres.

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While there is no suggestion that the Microsoft shutdown had malicious origins, the financial industry has been under relentless attack from AI-driven hackers and automated agents.

Microsoft attributed the disruption to a large number of servers becoming unexpectedly unavailable, increasing pressure on its remaining infrastructure, without elaborating. The company initiated recovery measures, including restarting affected servers and rerouting traffic.

We Regret the Impact

The company said it’s seeing “encouraging recovery progress,” with service availability and email delivery performance improving across a growing portion of affected infrastructure.

“We know our customers rely on our services to get important work done every day, and regret the impact these outages had on those who depend on us,” Charles Lamanna, EVP, Copilot, Agents and Platform at Microsoft told ET in a statement. “Our teams are reviewing what happened and how we can prevent similar issues going forward.”

While core banking and payment infrastructure didn’t appear to be impacted in India, the outage delayed the processing of customer instructions, transaction confirmations and communications with counterparties.

However, banking and NBFC executives told ET that while most routine messaging had come to a standstill following the disruption of Outlook and Exchange Online services, critical information was being routed through Microsoft Teams and SharePoint.

Employees were using Teams for urgent coordination and SharePoint for sharing important documents and information, allowing essential activities to continue despite the halt of regular email services. At some smaller NBFCs and housing finance companies (HFCs), employees also turned to WhatsApp and Gmail for less critical communication as they sought temporary workarounds.

HDFC Bank told customers that banking operations were unaffected. “Your inbox might be down. Your banking isn’t,” the country’s largest private sector lender said on X. Banking channels continued to operate despite the wider Microsoft disruption, it said.

Email-based customer support at airlines like IndiGo, Akasa Air, Air India and Air India Express was also affected. The airlines reporting delays or temporary disruption in receiving and responding to passenger email. Flight operations were unaffected, they said.

IndiGo said email support had been hampered but other customer assistance channels, including its AI-powered chatbot 6E Skai, continued to operate round the clock.

Air India and Air India Express said there was no impact on flight operations or communication channels. The airline group said it had temporarily rerouted incoming emails to ensure uninterrupted delivery and was responding within its usual 24-hour timeline.

Akasa Air asked passengers to contact its 24-hour Akasa Care Centre or use social media for assistance.

The carriers were monitoring the situation and would keep passengers informed through operational customer communication channels.

“The outage may temporarily delay communication with overseas buyers and logistics partners,” said Ajay Sahai, director general, Federation of Indian Export Organisations. “Alternative communication channels are helping to minimise disruption, and it is too early to suggest any significant impact on trade.”

Meanwhile, trading activity at the stock exchanges continued unaffected as brokerages quickly switched to alternate systems to keep operations running smoothly.