diff --git a/CHANGES.md b/CHANGES.md
index e2a40194..7d1e5129 100644
--- a/CHANGES.md
+++ b/CHANGES.md
@@ -18,6 +18,10 @@ Notable changes between versions.
   * Configure worker nodes to use outbound rules and the load balancer for SNAT
 * Extend network security rules to allow IPv6 traffic, analogous to IPv4
 * Rename `region` variable to `location` to align with Azure platform conventions ([#1469](https://github.com/poseidon/typhoon/pull/1469))
+* Change worker pools from uniform to flexible orchestration mode ([#1473](https://github.com/poseidon/typhoon/pull/1473))
+* Add options to allow workers nodes to use ephemeral local disks ([#1473](https://github.com/poseidon/typhoon/pull/1473))
+  * Add `controller_disk_type` and `controller_disk_size` variables
+  * Add `worker_disk_type`, `worker_disk_size`, and `worker_ephemeral_disk` variables
 * Reduce the number of public IPv4 addresses needed for the Azure load balancer ([#1470](https://github.com/poseidon/typhoon/pull/1470))
 
 ```diff
@@ -30,6 +34,10 @@ module "cluster" {
 + network_cidr = {
 +   ipv4 = ["10.0.0.0/16"]
 + }
+
+  # optional
++ controller_disk_type = "StandardSSD_LRS"
++ worker_ephemeral_disk = true
 }
 ```
 
diff --git a/azure/fedora-coreos/kubernetes/controllers.tf b/azure/fedora-coreos/kubernetes/controllers.tf
index dab74257..5c4a0cfb 100644
--- a/azure/fedora-coreos/kubernetes/controllers.tf
+++ b/azure/fedora-coreos/kubernetes/controllers.tf
@@ -44,9 +44,9 @@ resource "azurerm_linux_virtual_machine" "controllers" {
   source_image_id = var.os_image
   os_disk {
     name                 = "${var.cluster_name}-controller-${count.index}"
+    storage_account_type = var.controller_disk_type
+    disk_size_gb         = var.controller_disk_size
     caching              = "None"
-    disk_size_gb         = var.disk_size
-    storage_account_type = "Premium_LRS"
   }
 
   # network
diff --git a/azure/fedora-coreos/kubernetes/variables.tf b/azure/fedora-coreos/kubernetes/variables.tf
index a8dd877b..90323487 100644
--- a/azure/fedora-coreos/kubernetes/variables.tf
+++ b/azure/fedora-coreos/kubernetes/variables.tf
@@ -22,41 +22,66 @@ variable "dns_zone_group" {
 
 # instances
 
+variable "os_image" {
+  type        = string
+  description = "Fedora CoreOS image for instances"
+}
+
+
 variable "controller_count" {
   type        = number
   description = "Number of controllers (i.e. masters)"
   default     = 1
 }
 
-variable "worker_count" {
-  type        = number
-  description = "Number of workers"
-  default     = 1
-}
-
 variable "controller_type" {
   type        = string
   description = "Machine type for controllers (see `az vm list-skus --location centralus`)"
   default     = "Standard_B2s"
 }
 
+variable "controller_disk_type" {
+  type        = string
+  description = "Type of managed disk for controller node(s)"
+  default     = "Premium_LRS"
+}
+
+variable "controller_disk_size" {
+  type        = number
+  description = "Size of the managed disk in GB for controller node(s)"
+  default     = 30
+}
+
+variable "worker_count" {
+  type        = number
+  description = "Number of workers"
+  default     = 1
+}
+
 variable "worker_type" {
   type        = string
   description = "Machine type for workers (see `az vm list-skus --location centralus`)"
   default     = "Standard_D2as_v5"
 }
 
-variable "os_image" {
+variable "worker_disk_type" {
   type        = string
-  description = "Fedora CoreOS image for instances"
+  description = "Type of managed disk for worker nodes"
+  default     = "Standard_LRS"
 }
 
-variable "disk_size" {
+variable "worker_disk_size" {
   type        = number
-  description = "Size of the disk in GB"
+  description = "Size of the managed disk in GB for worker nodes"
   default     = 30
 }
 
+variable "worker_ephemeral_disk" {
+  type        = bool
+  description = "Use ephemeral local disk instead of managed disk (requires vm_type with local storage)"
+  default     = false
+}
+
 variable "worker_priority" {
   type        = string
   description = "Set worker priority to Spot to use reduced cost surplus capacity, with the tradeoff that instances can be deallocated at any time."
diff --git a/azure/fedora-coreos/kubernetes/workers.tf b/azure/fedora-coreos/kubernetes/workers.tf
index 641ad226..e61ca3da 100644
--- a/azure/fedora-coreos/kubernetes/workers.tf
+++ b/azure/fedora-coreos/kubernetes/workers.tf
@@ -9,10 +9,13 @@ module "workers" {
   security_group_id        = azurerm_network_security_group.worker.id
   backend_address_pool_ids = local.backend_address_pool_ids
 
-  worker_count = var.worker_count
-  vm_type      = var.worker_type
-  os_image     = var.os_image
-  priority     = var.worker_priority
+  worker_count   = var.worker_count
+  vm_type        = var.worker_type
+  os_image       = var.os_image
+  disk_type      = var.worker_disk_type
+  disk_size      = var.worker_disk_size
+  ephemeral_disk = var.worker_ephemeral_disk
+  priority       = var.worker_priority
 
   # configuration
   kubeconfig            = module.bootstrap.kubeconfig-kubelet
diff --git a/azure/fedora-coreos/kubernetes/workers/variables.tf b/azure/fedora-coreos/kubernetes/workers/variables.tf
index f009a8c8..d1f2d791 100644
--- a/azure/fedora-coreos/kubernetes/workers/variables.tf
+++ b/azure/fedora-coreos/kubernetes/workers/variables.tf
@@ -52,6 +52,24 @@ variable "os_image" {
   description = "Fedora CoreOS image for instances"
 }
 
+variable "disk_type" {
+  type        = string
+  description = "Type of managed disk"
+  default     = "Standard_LRS"
+}
+
+variable "disk_size" {
+  type        = number
+  description = "Size of the managed disk in GB"
+  default     = 30
+}
+
+variable "ephemeral_disk" {
+  type        = bool
+  description = "Use ephemeral local disk instead of managed disk (requires vm_type with local storage)"
+  default     = false
+}
+
 variable "priority" {
   type        = string
   description = "Set priority to Spot to use reduced cost surplus capacity, with the tradeoff that instances can be evicted at any time."
diff --git a/azure/fedora-coreos/kubernetes/workers/workers.tf b/azure/fedora-coreos/kubernetes/workers/workers.tf
index ae20c4ff..9cfa3058 100644
--- a/azure/fedora-coreos/kubernetes/workers/workers.tf
+++ b/azure/fedora-coreos/kubernetes/workers/workers.tf
@@ -3,21 +3,29 @@ locals {
 }
 
 # Workers scale set
-resource "azurerm_linux_virtual_machine_scale_set" "workers" {
-  name                = "${var.name}-worker"
-  resource_group_name = var.resource_group_name
-  location            = var.location
-  sku                 = var.vm_type
-  instances           = var.worker_count
-  # instance name prefix for instances in the set
-  computer_name_prefix   = "${var.name}-worker"
-  single_placement_group = false
+resource "azurerm_orchestrated_virtual_machine_scale_set" "workers" {
+  name                        = "${var.name}-worker"
+  resource_group_name         = var.resource_group_name
+  location                    = var.location
+  platform_fault_domain_count = 1
+  sku_name                    = var.vm_type
+  instances                   = var.worker_count
 
   # storage
-  source_image_id = var.os_image
+  encryption_at_host_enabled = true
+  source_image_id            = var.os_image
   os_disk {
-    storage_account_type = "Standard_LRS"
-    caching              = "ReadWrite"
+    storage_account_type = var.disk_type
+    disk_size_gb         = var.disk_size
+    caching              = "ReadOnly"
+    # Optionally, use the ephemeral disk of the instance type (support varies)
+    dynamic "diff_disk_settings" {
+      for_each = var.ephemeral_disk ? [1] : []
+      content {
+        option    = "Local"
+        placement = "ResourceDisk"
+      }
+    }
   }
 
   # network
@@ -44,20 +52,24 @@ resource "azurerm_linux_virtual_machine_scale_set" "workers" {
   }
 
   # boot
-  custom_data = base64encode(data.ct_config.worker.rendered)
+  user_data_base64 = base64encode(data.ct_config.worker.rendered)
   boot_diagnostics {
     # defaults to a managed storage account
   }
 
   # Azure requires an RSA admin_ssh_key
-  admin_username = "core"
-  admin_ssh_key {
-    username   = "core"
-    public_key = local.azure_authorized_key
+  os_profile {
+    linux_configuration {
+      admin_username = "core"
+      admin_ssh_key {
+        username   = "core"
+        public_key = local.azure_authorized_key
+      }
+      computer_name_prefix = "${var.name}-worker"
+    }
   }
 
   # lifecycle
-  upgrade_mode = "Manual"
   # eviction policy may only be set when priority is Spot
   priority        = var.priority
   eviction_policy = var.priority == "Spot" ? "Delete" : null
@@ -66,25 +78,6 @@ resource "azurerm_linux_virtual_machine_scale_set" "workers" {
   }
 }
 
-# Scale up or down to maintain desired number, tolerating deallocations.
-resource "azurerm_monitor_autoscale_setting" "workers" {
-  name                = "${var.name}-maintain-desired"
-  resource_group_name = var.resource_group_name
-  location            = var.location
-  # autoscale
-  enabled            = true
-  target_resource_id = azurerm_linux_virtual_machine_scale_set.workers.id
-
-  profile {
-    name = "default"
-    capacity {
-      minimum = var.worker_count
-      default = var.worker_count
-      maximum = var.worker_count
-    }
-  }
-}
-
 # Fedora CoreOS worker
 data "ct_config" "worker" {
   content = templatefile("${path.module}/butane/worker.yaml", {
diff --git a/azure/flatcar-linux/kubernetes/controllers.tf b/azure/flatcar-linux/kubernetes/controllers.tf
index 56a352ef..a4e11729 100644
--- a/azure/flatcar-linux/kubernetes/controllers.tf
+++ b/azure/flatcar-linux/kubernetes/controllers.tf
@@ -49,9 +49,9 @@ resource "azurerm_linux_virtual_machine" "controllers" {
   # storage
   os_disk {
     name                 = "${var.cluster_name}-controller-${count.index}"
+    storage_account_type = var.controller_disk_type
+    disk_size_gb         = var.controller_disk_size
     caching              = "None"
-    disk_size_gb         = var.disk_size
-    storage_account_type = "Premium_LRS"
   }
 
   # Flatcar Container Linux
diff --git a/azure/flatcar-linux/kubernetes/variables.tf b/azure/flatcar-linux/kubernetes/variables.tf
index 57a4e3d3..232331c4 100644
--- a/azure/flatcar-linux/kubernetes/variables.tf
+++ b/azure/flatcar-linux/kubernetes/variables.tf
@@ -22,30 +22,6 @@ variable "dns_zone_group" {
 
 # instances
 
-variable "controller_count" {
-  type        = number
-  description = "Number of controllers (i.e. masters)"
-  default     = 1
-}
-
-variable "worker_count" {
-  type        = number
-  description = "Number of workers"
-  default     = 1
-}
-
-variable "controller_type" {
-  type        = string
-  description = "Machine type for controllers (see `az vm list-skus --location centralus`)"
-  default     = "Standard_B2s"
-}
-
-variable "worker_type" {
-  type        = string
-  description = "Machine type for workers (see `az vm list-skus --location centralus`)"
-  default     = "Standard_D2as_v5"
-}
-
 variable "os_image" {
   type        = string
   description = "Channel for a Container Linux derivative (flatcar-stable, flatcar-beta, flatcar-alpha)"
@@ -57,12 +33,60 @@ variable "os_image" {
   }
 }
 
-variable "disk_size" {
+variable "controller_count" {
   type        = number
-  description = "Size of the disk in GB"
+  description = "Number of controllers (i.e. masters)"
+  default     = 1
+}
+
+variable "controller_type" {
+  type        = string
+  description = "Machine type for controllers (see `az vm list-skus --location centralus`)"
+  default     = "Standard_B2s"
+}
+
+variable "controller_disk_type" {
+  type        = string
+  description = "Type of managed disk for controller node(s)"
+  default     = "Premium_LRS"
+}
+
+variable "controller_disk_size" {
+  type        = number
+  description = "Size of the managed disk in GB for controller node(s)"
   default     = 30
 }
 
+variable "worker_count" {
+  type        = number
+  description = "Number of workers"
+  default     = 1
+}
+
+variable "worker_type" {
+  type        = string
+  description = "Machine type for workers (see `az vm list-skus --location centralus`)"
+  default     = "Standard_D2as_v5"
+}
+
+variable "worker_disk_type" {
+  type        = string
+  description = "Type of managed disk for worker nodes"
+  default     = "Standard_LRS"
+}
+
+variable "worker_disk_size" {
+  type        = number
+  description = "Size of the managed disk in GB for worker nodes"
+  default     = 30
+}
+
+variable "worker_ephemeral_disk" {
+  type        = bool
+  description = "Use ephemeral local disk instead of managed disk (requires vm_type with local storage)"
+  default     = false
+}
+
 variable "worker_priority" {
   type        = string
   description = "Set worker priority to Spot to use reduced cost surplus capacity, with the tradeoff that instances can be deallocated at any time."
diff --git a/azure/flatcar-linux/kubernetes/workers.tf b/azure/flatcar-linux/kubernetes/workers.tf
index cd60d447..c9c492a1 100644
--- a/azure/flatcar-linux/kubernetes/workers.tf
+++ b/azure/flatcar-linux/kubernetes/workers.tf
@@ -9,10 +9,13 @@ module "workers" {
   security_group_id        = azurerm_network_security_group.worker.id
   backend_address_pool_ids = local.backend_address_pool_ids
 
-  worker_count = var.worker_count
-  vm_type      = var.worker_type
-  os_image     = var.os_image
-  priority     = var.worker_priority
+  worker_count   = var.worker_count
+  vm_type        = var.worker_type
+  os_image       = var.os_image
+  disk_type      = var.worker_disk_type
+  disk_size      = var.worker_disk_size
+  ephemeral_disk = var.worker_ephemeral_disk
+  priority       = var.worker_priority
 
   # configuration
   kubeconfig            = module.bootstrap.kubeconfig-kubelet
diff --git a/azure/flatcar-linux/kubernetes/workers/variables.tf b/azure/flatcar-linux/kubernetes/workers/variables.tf
index 6fc2fab8..67a13d85 100644
--- a/azure/flatcar-linux/kubernetes/workers/variables.tf
+++ b/azure/flatcar-linux/kubernetes/workers/variables.tf
@@ -58,6 +58,24 @@ variable "os_image" {
   }
 }
 
+variable "disk_type" {
+  type        = string
+  description = "Type of managed disk"
+  default     = "Standard_LRS"
+}
+
+variable "disk_size" {
+  type        = number
+  description = "Size of the managed disk in GB"
+  default     = 30
+}
+
+variable "ephemeral_disk" {
+  type        = bool
+  description = "Use ephemeral local disk instead of managed disk (requires vm_type with local storage)"
+  default     = false
+}
+
 variable "priority" {
   type        = string
   description = "Set priority to Spot to use reduced cost surplus capacity, with the tradeoff that instances can be evicted at any time."
diff --git a/azure/flatcar-linux/kubernetes/workers/workers.tf b/azure/flatcar-linux/kubernetes/workers/workers.tf
index fbd109fc..0d0d22e4 100644
--- a/azure/flatcar-linux/kubernetes/workers/workers.tf
+++ b/azure/flatcar-linux/kubernetes/workers/workers.tf
@@ -8,20 +8,28 @@ locals {
 }
 
 # Workers scale set
-resource "azurerm_linux_virtual_machine_scale_set" "workers" {
-  name                = "${var.name}-worker"
-  resource_group_name = var.resource_group_name
-  location            = var.location
-  sku                 = var.vm_type
-  instances           = var.worker_count
-  # instance name prefix for instances in the set
-  computer_name_prefix   = "${var.name}-worker"
-  single_placement_group = false
+resource "azurerm_orchestrated_virtual_machine_scale_set" "workers" {
+  name                        = "${var.name}-worker"
+  resource_group_name         = var.resource_group_name
+  location                    = var.location
+  platform_fault_domain_count = 1
+  sku_name                    = var.vm_type
+  instances                   = var.worker_count
 
   # storage
+  encryption_at_host_enabled = true
   os_disk {
-    storage_account_type = "Standard_LRS"
-    caching              = "ReadWrite"
+    storage_account_type = var.disk_type
+    disk_size_gb         = var.disk_size
+    caching              = "ReadOnly"
+    # Optionally, use the ephemeral disk of the instance type (support varies)
+    dynamic "diff_disk_settings" {
+      for_each = var.ephemeral_disk ? [1] : []
+      content {
+        option    = "Local"
+        placement = "ResourceDisk"
+      }
+    }
   }
 
   # Flatcar Container Linux
@@ -65,20 +73,24 @@ resource "azurerm_linux_virtual_machine_scale_set" "workers" {
   }
 
   # boot
-  custom_data = base64encode(data.ct_config.worker.rendered)
+  user_data_base64 = base64encode(data.ct_config.worker.rendered)
   boot_diagnostics {
     # defaults to a managed storage account
   }
 
   # Azure requires an RSA admin_ssh_key
-  admin_username = "core"
-  admin_ssh_key {
-    username   = "core"
-    public_key = local.azure_authorized_key
+  os_profile {
+    linux_configuration {
+      admin_username = "core"
+      admin_ssh_key {
+        username   = "core"
+        public_key = local.azure_authorized_key
+      }
+      computer_name_prefix = "${var.name}-worker"
+    }
   }
 
   # lifecycle
-  upgrade_mode = "Manual"
   # eviction policy may only be set when priority is Spot
   priority        = var.priority
   eviction_policy = var.priority == "Spot" ? "Delete" : null
@@ -87,25 +99,6 @@ resource "azurerm_linux_virtual_machine_scale_set" "workers" {
   }
 }
 
-# Scale up or down to maintain desired number, tolerating deallocations.
-resource "azurerm_monitor_autoscale_setting" "workers" {
-  name                = "${var.name}-maintain-desired"
-  resource_group_name = var.resource_group_name
-  location            = var.location
-  # autoscale
-  enabled            = true
-  target_resource_id = azurerm_linux_virtual_machine_scale_set.workers.id
-
-  profile {
-    name = "default"
-    capacity {
-      minimum = var.worker_count
-      default = var.worker_count
-      maximum = var.worker_count
-    }
-  }
-}
-
 # Flatcar Linux worker
 data "ct_config" "worker" {
   content = templatefile("${path.module}/butane/worker.yaml", {
diff --git a/docs/img/typhoon-azure-load-balancing.png b/docs/img/typhoon-azure-load-balancing.png
index 0d227f7a..beb532e1 100644
Binary files a/docs/img/typhoon-azure-load-balancing.png and b/docs/img/typhoon-azure-load-balancing.png differ