CEO Ballmer to Retire Within 12 Months as Microsoft Sruggles to Modernize

Microsoft CEO Steve Ballmer will retire within the next 12 months, depending on when a replacement is found, the company announced early Friday.

The announcement comes barely one month after Ballmer led a massive reorganization of the company in an attempt to bring all divisions under one unified vision. Photo: Wired Photostream/Flickr

Microsoft has stepped into a new and uncertain era with the announcement that CEO Steve Ballmer will retire within 12 months.

The company’s lead independent director, John Thompson, will oversee the search for his successor, heading a committee that will also include Microsoft co-founder Bill Gates. Investors applauded the move, sending the shares up the most since 2009.

As the Bloomberg reports, members of Microsoft’s senior leadership team only learned about Ballmer’s decision to retire last night, said a person with knowledge of the matter. Many senior executives were surprised, said the person, who asked not to be identified because the discussions were private.

“I’ll work closely with the other members of the board to identify a great new CEO,” said Gates. “We’re fortunate to have Steve in his role until the new CEO assumes these duties.”

There are no obvious candidates to succeed Ballmer at a company that has only had two CEOs in its 38-year history. Ballmer had once indicated that he intended to stay at least until 2017.

“There is never a perfect time for this type of transition, but now is the right time,” Ballmer said in a statement.

The company needed a leader who could see through its reorganisation and new strategy, he added. “My original thoughts on timing would have had my retirement happen in the middle of our company’s transformation to a devices and services company. We need a CEO who will be here longer term for this new direction.”

Ballmer’s planned exit comes just weeks after the company announced a major reorganization and delivered an earnings report that showed across-the-board weakness in the business, including dismal sales of the company’s new Surface tablet and a lukewarm reaction to the crucial Windows 8 operating system, reports Reuters.

Ballmer has faced criticism from investors for years as rivals led by Apple Inc and Google Inc came to dominate huge new markets in smartphones, tablets, Internet search and cloud computing even as Microsoft remained reliant on the traditional personal computer.

Ballmer, 57, first met Microsoft founder Bill Gates in 1973 while they were living down a dormitory hall from each other at Harvard University.

He joined Microsoft in 1980 to bring some business discipline and salesmanship to a company that had just landed a contract to supply an operating system for a personal computer that IBM would release in 1981.

Ballmer did the job so well that he would become Gates’ sounding board and succeed him as CEO in 2000.

When Ballmer took the helm in January 2000, the company was worth more than $601 billion.

Microsoft, which supplies the software running most PCs, lost almost half its value on Ballmer’s watch. The stock hasn’t closed above $50 since his first year on the job amid competition from Google Inc., Apple Inc. and Facebook Inc. in everything from tablets to the Web.

Today, its value is less than half that amount, at nearly $270 billion. After the news broke, Microsoft’s stock shot up as much as 9 percent and later came within two dollars of a 52-week high.

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