The move marks a strategy shift that is seen at Microsoft at the start of each fiscal year. In 2006 it rethought its products in light of the criticism it received for Windows Vista, while in 2007 and 2008 it split up the sections it had recently consolidated into three once more.
The company now aims to focus on three key areas: cloud, personal computing and enterprise applications, which had been part of the premise for Nadella taking over from Steve Ballmer in 2014. In Microsoft’s history, no other reshuffle has involved the departure of so many executives at once.
Four senior members of staff will be leaving the company due to Nadella’s decision to merge several groups into others. The most notable among those leaving is Stephen Elop, the former Nokia CEO who regained a position at Microsoft after the companies merged in 2014.
Elop was responsible for Microsoft’s Lumia devices and was seen as the future CEO until Nadella took the role.
“Stephen and I have agreed that now is the right time for him to retire from Microsoft,” Nadella said in an email to employees. “I regret the loss of leadership that this represents, and look forward to seeing where his next destination will be.”
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The email also noted that Elop would be leaving the company “after a designated transition period”.
As part of the shakeup, Kirill Tatarinov, the head of Microsoft’s business solutions, is also set to leave the company. He oversees Microsoft’s $2bn Dynamics unit. Leaving with him is Eric Rudder, who oversaw Microsoft’s “Advanced Strategy”.
Another key departure is the executive vice president of advertising and strategy, Mark Penn. Penn was a key figure behind the Scroogled ad campaign which attacked Google. He intends to head up a new private equity fund that will invest in digital marketing services.
Nadella claimed that the departures would help the company achieve its goals of reinventing productivity and business processes.
“We are aligning our engineering efforts and capabilities to deliver on our strategy and, in particular, our three core ambitions,” Nadella said in a statement. “This change will enable us to deliver better products and services that our customers love at a more rapid pace.”
Terry Myerson, Microsoft’s Windows chief will lead a new team – the Windows and Devices Group – which combines all of the hardware and software engineering talent into one entity.
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