SEATTLE – Microsoft is telling employees that a reorganization plan by departing Chief Executive Officer Steve Ballmer will proceed, seeking to reassure senior managers who are concerned that the search for a successor will throw turnaround efforts into disarray.
Some members of Microsoft’s senior leadership team emailed their staff on Aug. 23 to say they remain committed to Ballmer’s vision and the reorganization, said three people with knowledge of the matter. Some Microsoft executives have seen an increase in outside job offers since the July restructuring plan and others may be tempted to leave after stock grants and bonuses are awarded in late August, said the people, who asked not to be identified because the communications were private.
Even as it hunts for a CEO who may change tack, Microsoft’s board needs managers to execute the reorganization plan, the biggest shift in more than a decade.
Ballmer is emphasizing hardware and Internet-based services, shifting away from software for the declining personal-computer industry and putting Microsoft on better footing to compete with Google, Facebook and Apple in mobile devices and online advertising.
They need to change everything, everything, said Ivan Feinseth, chief investment officer of Tigress Financial Partners LLC in New York. They need to be better in social, mobile, analytics and cloud, and they really have very little to offer in those areas.
Ballmer said on Aug. 23 that he intends to retire within 12 months after leading Microsoft since January 2000. During the CEO’s tenure, Microsoft has battled to stay relevant as consumers have shifted from using its core Windows software for PCs toward mobile devices from Apple and others. Facebook and Google have also pushed ahead in social networking and online advertising, areas where Microsoft remains weak.
Tony Imperati, a spokesman for Microsoft, declined to comment.
Microsoft can ill afford to wait and see if a new CEO alters the Ballmer plan. With the company behind in mobile and tablets and as core revenue from its flagship Windows product shrinks, the stock is down about 37 percent under Ballmer’s watch.
Last month, Microsoft also reported sales and profit that missed analysts’ estimates.
While embarking on a new CEO search, Microsoft will also have to contend with retaining employees and tamping down unease that for some began with the July reorganization.
There’s going to be more confusion near-term, said Sid Parakh, an analyst at McAdams Wright Ragen in Seattle.
It just seems like now there’s the question of how’s the new person going to look at these changes. From an employee perspective, they are at a point of OK, now what do we do here?’
Microsoft executives and workers in the process of moving into new divisions and roles don’t know if they will be asked to shift again under new management.