We would like to enforce that our employees use Office365 SSO option to access Jira and disable their ability to set/use their own passwords in Jira.
Basically, if they open our Jira's login page i.e. below, they should only get the option to login through Microsoft and no other option.
Can you please suggest the best way to do this?
What you are after is not really possible 100%.
With Atlassian Access, any SAML configuration, including o365 will be enforced for users from your organisation only (i.e. with email domains that you control). If you have users with other emails in the Cloud instance - the rules of THEIR organisations will apply.
This however will only happen AFTER they enter their user-id (i.e. their email) in the login form. Login with Google and Login with Microsoft buttons are "shortcuts" that are not enforced, they will still remain and can't be hidden. So is the "sign up for the account" - people will have this option though going via that with an arbitrary email won't necessarily give them access to your instance.
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