Microsoft’s product chief, Panos Panay, will leave the software and hardware maker, executive vice president Rajesh Jha told employees on Monday.

The shakeup represents a changing of the guard after more than a decade of sales of Microsoft’s Surface PCs, which Panay has presented to consumers at company events. Surface sales have failed to keep up with the growth of cloud services, and Windows, a source of profitable revenue, has yet to return to growth after the pandemic kicked off a buying frenzy.

But the company isn’t giving up on these two areas.

“We remain steadfast and convicted in our strategy and Yusuf Mehdi will take lead on our Windows and Surface businesses and products externally,” Microsoft CEO Satya Nadella said in a statement. Mehdi, who joined Microsoft in 1992, is Microsoft’s consumer chief marketing officer.

As part of the changes, Charles Simonyi, who led the development of Microsoft’s popular Word and Excel applications, is joining management teams for the Experiences and Devices group that Jha is in charge of, Jha wrote in his memo to employees. Simonyi, now 75, rejoined Microsoft in 2017 as a technical fellow as the company acquired his startup Intentional Software.

“Our commitment to Surface and MR remains unchanged,” Jha wrote, referring to mixed reality, a category that includes Microsoft’s HoloLens augmented-reality devices.

Leadership changes involving Panos’ departure will take effect immediately, just three days before Microsoft holds an event in New York where the company is expected to announce its next generation of Surface devices.

After 10 years on the market, Surface had failed to gain more than a few percentage points of market share in PC shipments, although device designs have inspired other device makers that sell Windows machines. Microsoft picks up revenue from licenses sold to these device makers.

Panay joined Microsoft in 2004 as a group program manager on PC software. He took on additional leadership of Windows, the world’s leading PC operating system, starting in 2020. And since 2021, he has been part of the company’s senior leadership team. He has not yet announced his future plans.

“After 19 incredible years at Microsoft, I’ve decided to turn the page and write the next chapter,” he wrote on X, the platform formerly known as Twitter. “I’m forever grateful for my time at Microsoft and the amazing people I had the honor to make products with.”

Read the full memo below.

Team, 

After nearly 20 years at the company, Panos Panay has decided to leave Microsoft. Panos has had an incredible impact on our products and culture as well as the broader devices ecosystem. Under Panos’ leadership, the team created the iconic Surface brand with loved products. More recently, as the leader of Windows, the team has brought amazing services and experiences to hundreds of millions with Windows 11 on innovative devices including those from our OEM partners. He will be missed, and I am personally very grateful for his many contributions over the years. Please join me in wishing him well. 

Moving forward, we will double down on our strategy. These changes will be effective immediately with Panos’ help in the transition.  

• Build silicon, systems and devices that span Windows, client and cloud for an AI world. This team will be led by Pavan Davuluri, who will report directly to me. Brett Ostrum, Nino Storniolo, Linda Averett, Ken Pan, Ralf Groene, Aidan Marcuss, Carlos Picoto, Stevie Bathiche, Robin Seiler, Ruben Caballero and Anuj Gosalia will move to report to Pavan with their teams intact. Windows planning and release management will continue to be in this team. Our commitment to Surface and MR remains unchanged. 
• Build experiences that blend web, services and Windows for an AI world. To this end, Shilpa Ranganathan, Jeff Johnson and Ali Akgun will directly report to Mikhail Parakhin and form a new Windows and Web Experiences Team, moving with their teams intact.  
• Yusuf Mehdi will take on the responsibility of leading the Windows and Surface businesses with our OEM and Retail partners. 

In addition, Charles Simonyi, Terri Chudzik and Erin Kolb will join the E+D management teams and Ralf Groene and Mike Davidson will work together on the best alignment on design teams.  

We will set up time for an AMA in the coming days to answer questions. Let’s continue to stay focused on executing on our existing plans. Thank you for all that you do, and the impact that you have for our customers and partners.  

Best, 

Rajesh 

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