Microsoft reshuffle as PC loses out to tablets

Microsoft is reshuffling its business in an attempt to promote faster innovation and a sharper focus on devices and services. The move comes amid a steady decline in demand for PCs as people turn to tablets and other mobile gadgets.

CEO Steve Ballmer said in a memo to employees that the changes mean the company is “rallying behind a single strategy” and organising by function.

While it has been widely anticipated, it’s too early to tell how well the reorganisation will help Microsoft compete with more nimble rivals like Apple and Google.

“Although we will deliver multiple devices and services to execute and monetise the strategy, the single core strategy will drive us to set shared goals for everything we do. We will see our product line holistically, not as a set of islands,” Mr Ballmer wrote.

The company’s new divisions include engineering, marketing and business development. Microsoft named veteran executive Julie Larson-Green head of its devices and studios engineering group, overseeing hardware development, games, music and entertainment.

She had been promoted in November to lead all Windows software and hardware engineering after Steven Sinofsky, the president of its Windows and Windows Live operations, left the company shortly after the launch of Windows 8.

Terry Myerson will lead Microsoft’s operating systems and engineering group, namely Windows. Qi Lu will head applications and services.

Janney Capital Markets analyst Yun Kim said the reorganisation helps align Microsoft’s various divisions around its devices and services strategy, but added that he’s taking a “wait and see” approach.