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Microsoft’s Ballmer Said to Plan Broad Restructuring

Microsoft Corp. CEO Steve Ballmer
Microsoft Corp. Chief Executive Officer Steve Ballmer announced a shift in strategy last year for the world’s largest software maker to focus on computing devices and Internet-based services. Photographer: Scott Eells/Bloomberg

Microsoft Corp. Chief Executive Officer Steve Ballmer is planning a reorganization aimed at reducing the number of business units and putting more focus on devices and services, according to people familiar with the matter.

The changes would give greater responsibility to executives including Satya Nadella, head of the server business, Don Mattrick, who runs Xbox, Qi Lu, chief of the online group, and Tony Bates, president of Skype, according to two people, who asked not to be identified because the discussions are private. Andy Lees, who has overseen corporate development and strategy since November, will probably leave the company in the coming months, the people said.

Ballmer, who is struggling to gain share in mobile-phones and tablets, announced a shift in strategy last year for the world’s largest software maker to focus on computing devices and Internet-based services. Any staffing changes will also provide clues as to the executives who may eventually succeed Ballmer.

Plans for the executive shakeup, which Ballmer, 57, has been discussing with the board, are not final and may still change, the people said. The All Things D blog reported some details of the restructuring yesterday.

The changes are aimed at cutting the number of disparate units and fostering cooperation between products so that Microsoft can better compete against Apple Inc. and Google Inc., said one person.

Peter Wootton, a spokesman for Microsoft, declined to comment on restructuring or staffing changes.

New Structure

One idea under consideration by Ballmer would create four divisions: an enterprise business led by Nadella; a hardware unit overseen by Mattrick; an applications and services division under Lu; and an operating-systems group jointly led by Terry Myerson, Windows phone chief, and Julie Larson-Green, head of Windows engineering, said one person. Bates would also be given a significant role, said the person.

In April, activist investor ValueAct Holdings LP disclosed a stake of about a $1.9 billion in Microsoft and said the company should become a leader in Web-based cloud computing, putting more pressure on Ballmer to focus on that area.

Microsoft, based in Redmond, Washington, currently has eight divisions or units, and six presidents. The Windows business has been run by two vice presidents, Larson-Green and Tami Reller, since Steven Sinofsky was pushed out in November. The Office unit is run by Kurt DelBene.

The reorganization has been under discussion even before Sinofsky’s ouster, said the people. Ballmer stressed at the time the need for Microsoft’s groups to better cooperate and for executives to make that happen.

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