Microsoft has announced that current CEO Steve Ballmer will be stepping down from his duties within one year of the selection of a new successor, with the company forming a new committee to find the successor either internally or outside of the company. To that end the succession committee for the selection process will be headed up by John Thompson, with former CEO Bill Gates, Chuck Noski and Steve Luczo while Ballmer continues in the role until the successor is found and formally announced.
The announcement of Ballmer stepping down follows the unexpected exit of Xbox lead Don Mattrick in recent weeks to Zynga after rumors of an internal executive reshuffling started picking up traction so that the company could better weather the decline in computer sales, which is greatly affecting its core businesses in Windows and Office. Mattrick led the development of the Xbox One with the inclusion of DRM such as daily check-ins for games and other functionality such as the mandatory inclusion of the Kinect camera, which caused massive controversy before the policies were rolled back in recent weeks, but not before Mattrick left as a result of the massive public relations fallout from the initial announcement of the console’s policies.
With Ballmer leaving within one year, the announcement comes at a pivotal time for the conglomerate. Windows RT has cost Microsoft over 1 billion and continues to lose money as OEMs either drop the operating system after sluggish sales or completely ignore it altogether.
Windows Phone 8 still struggles to gain marketshare in the US despite even more money being sunk into marketing in recent weeks with the release of the Nokia Lumia 1020 including the manufacturer’s large-sensor PureView camera technology as an AT&T-exclusive in the US, while international releases are slated to start next month along with less expensive Lumia models for emerging markets. Below, the letter penned by Steve Ballmer on the transition from CEO:
I am writing to let you know that I will retire as CEO of Microsoft within the next 12 months, after a successor is chosen. There is never a perfect time for this type of transition, but now is the right time. My original thoughts on timing would have had my retirement happen in the middle of our transformation to a devices and services company focused on empowering customers in the activities they value most. We need a CEO who will be here longer term for this new direction. You can read the press release on Microsoft News Center.
This is a time of important transformation for Microsoft. Our new Senior Leadership team is amazing. The strategy we have generated is first class. Our new organization, which is centered on functions and engineering areas, is right for the opportunities and challenges ahead.
Microsoft is an amazing place. I love this company. I love the way we helped invent and popularize computing and the PC. I love the bigness and boldness of our bets. I love our people and their talent and our willingness to accept and embrace their range of capabilities, including their quirks. I love the way we embrace and work with other companies to change the world and succeed together. I love the breadth and diversity of our customers, from consumer to enterprise, across industries, countries, and people of all backgrounds and age groups.
I am proud of what we have achieved. We have grown from $7.5 million to nearly $78 billion since I joined Microsoft, and we have grown from employing just over 30 people to almost 100,000. I feel good about playing a role in that success and having committed 100 percent emotionally all the way. We have more than 1 billion users and earn a great profit for our shareholders. We have delivered more profit and cash return to shareholders than virtually any other company in history.
I am excited by our mission of empowering the world and believe in our future success. I cherish my Microsoft ownership, and look forward to continuing as one of Microsoft’s largest owners.
This is an emotional and difficult thing for me to do. I take this step in the best interests of the company I love; it is the thing outside of my family and closest friends that matters to me most.
Microsoft has all its best days ahead. Know you are part of the best team in the industry and have the right technology assets. We cannot and will not miss a beat in these transitions. I am focused and driving hard and know I can count on all of you to do the same. Let’s do ourselves proud.