Steve Ballmer Reorganizes Microsoft

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As expected, Microsoft CEO Steve Ballmer unveiled his plan for restructuring the company on Thursday. The changes are designed to encourage cooperation throughout the organization and to make Microsoft more competitive.

The Washington Post’s Hayley Tsukayama reported, “Microsoft is moving into a new era, announcing Thursday that it’s reorganizing the company to focus on two major areas: devices and services. In a sweeping memo to all employees posted to the company’s Web site, Microsoft chief executive Steve Ballmer outlined a ‘far-reaching realignment’ that he said will help the company keep pace with a ‘fast changing world’ and pulls Microsoft from a collection of siloed divisions into a more cohesive company.”

The Wall Street Journal’s Shira Ovide and Don Clark explained, “The long-expected set of moves announced by Chief Executive Steve Ballmer strips away a structure based around divisions overseeing particular products, such as Microsoft Windows, the Xbox videogame console or the Office bundle of workplace software. In its place, Microsoft is imposing a horizontal scheme with managers that oversee different kinds of functions—like engineering, marketing and finance—that would be applied to multiple product lines. Mr. Ballmer said the move is designed to make sure that the company runs ‘holistically, not as a set of islands.'”

Nick Wingfield with The New York Times added, “Microsoft said it would dissolve its eight product divisions in favor of four new ones arranged around broader themes, a change meant to encourage greater collaboration as competitors like Apple and Google outflank it in the mobile and Internet markets. Steven A. Ballmer, the longtime chief executive, will shuffle the responsibilities of nearly every senior member of his executive bench as a result. ‘To execute, we’ve got to move from multiple Microsofts to one Microsoft,’ Mr. Ballmer said in an interview.”

Bloomberg’s Dina Bass noted, “Windows chief Julie Larson-Green will shift to oversee all hardware including the Surface tablet and Xbox console and related games, while Windows Phone software head Terry Myerson will now lead development for that area as well as Windows and Xbox operating system, the company said today in a statement.”