No, they didn't. This community read too much into a blog post that stated "over 1 billion," compared it against an old blog post from several years ago that stated a more precise number of "1.4 billion" and came to the hasty conclusion that they must have lost 400 million users.

Microsoft has since updated their blog post to clarify that it's now "over 1.4 billion."

Edit: downvotes, really? Can't even correct misinformation in this community anymore?