Microsoft CEO Unveils 'One Microsoft' in Broad Shake-Up

Thursday, 11 Jul 2013 | 9:36 AM ET
Kurt DelBene
David Paul Morris | Bloomberg | Getty Images
Kurt DelBene

Software giant Microsoft announced a long-awaited restructuring on Thursday, organizing itself around key areas designed to make the company more nimble in the face of fierce competition in the technology sector.

As part of the reorganization, Microsoft announced the president of its Microsoft Office division, Kurt DelBene, will be retiring. Early media reports suggested that many in the executive suite were nervous about the impending change.

Microsoft Announces Restructuring Plans
John Fortt and the "Squawk on the Street" news team discuss the tech giant's realignment announcement and whether its concept of "One Microsoft" will work.

The company's move comes as traditional computers are increasingly taking a backseat to mobile devices, and the applications that support them. Sales of personal computers — Microsoft's traditional strength for products like Windows and Office — have slumped to historical lows in the broad move toward gadgets that enhance productivity and provide entertainment.

As consumers migrate to tablets and smartphones, Microsoft has struggled to keep pace with the other top dogs in the technology sector like Google and Apple, and lacks a coherent mobile strategy.

Google's Android software — run on Samsung's wildly popular Galaxy phones — and Apple's iOS for iPhone take up an estimated 92 percent of the market. That has left little room for Microsoft's Windows smartphone to chip away at their dominance.

Microsoft's restructuring centers around beefing up strategy dedicated primarily to operating systems, applications, cloud computing and devices. According to a communique, the new reorganization gives Microsoft's advertising, marketing and media apparatus more authority.

As part of its push into the brave new world of mobile, the company named Julie Larson-Green as head of devices and studios engineering group, overseeing areas such as hardware development, games, music and entertainment. Terry Myerson will head up Microsoft's operating systems and engineering group, which includes Windows.

The reorganization process is expected to be completed by the end of the calendar year as Microsoft aims to "figure things out," the company said.

In a release, CEO Steve Ballmer said the realignment would make Microsoft "innovate with greater speed, efficiency and capability in a fast-changing world," while helping the company "execute even better" in creating devices and services.

The full text of the announcement can be found here.

—The Associated Press contributed to this article.

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  • Matt Hunter is the senior technology editor at CNBC.com.

  • Cadie Thompson is a tech reporter for the Enterprise Team for CNBC.com.

  • Working from Los Angeles, Boorstin is CNBC's media and entertainment reporter and editor of CNBC.com's Media Money section.

  • Jon Fortt is an on-air editor. He covers the companies, start-ups, and trends that are driving innovation in the industry.

  • Lipton is CNBC's technology correspondent, working from CNBC's Silicon Valley bureau.

  • Mark is CNBC's Silicon Valley/San Francisco Bureau Chief covering technology and digital media.