Clearly that infosec team doesn’t know what they’re doing and is costing the organization unnecessary $$$ at this point.
I would say they haven’t analyzed the risks properly, especially since we have both on prem and cloud proxy services.
But, it’s a boneheaded move regardless to try to migrate 93000 or so employees in 1 day. Some sites have bonded T1’s as their primary ISP link (4.5 Mbps), or even 4G/LTE. Even 3 employees with 3-4 Gb Outlook *.pst files would make that unworkable.
We’re MOVING to SDWAN which would help address the issue you point out, but with hundreds of sites (if not a thousand+), that’s going to be a multi-year project, of course.