When the chief executive officer of Microsoft (NASDAQ:MSFT), Steve Balmer, announced late last week that he would retire after 33 years at the company, many were shocked. Ballmer, 57, had only recently announced an aggressive reorganization plan reportedly ordered to make Microsoft a more cohesive company, and the restructuring effort he outlined never mentioned anything about a new CEO.
But as of Friday, the CEO apparently won’t be involved in those efforts for much longer, because Ballmer announced that he will depart from Microsoft within the next 12 months — when another executive will presumably take his place and pick up where he left off. Some investors are excited, while others confused.
Although certain shareholders have long been rallying for Balmer’s removal, it never seemed like an actual possibility until now, leaving many to wonder why this decision was seemingly suddenly made and whose idea it really was.
Unsurprisingly, Microsoft hasn’t yet leaked any hints as to why Ballmer is suddenly leaving or how he really feels about the decision. The company has maintained that the CEO’s departure will be a smooth and amicable one, and former CEO Bill Gates even noted in his announcement that, “We’re fortunate to have Steve in his role until the new CEO assumes these duties.”
Still, we’re not yet convinced that Ballmer’s exodus was a planned one, and one that he expected and thus accepted gracefully, especially since only recently crafting the company’s restructuring plans. Many believe that the CEO ultimately had a departure timeline, but it certainly wasn’t as initially early as this year.
That specific stance is supported by certain lines in his announcement that All Things D highlights when Ballmer admits, ”My original thoughts on timing would have had my retirement happen in the middle of our transformation to a devices and services company focused on empowering customers in the activities they value most.” Thus, instead of leaving “in the middle” of those efforts — all of a sudden, Ballmer is departing almost before they’re even beginning, and now speculation over Microsoft executive discord is growing.
Reasons for Ballmer’s immediate departure are varied. Some sources point to the potential proxy fight that could erupt if the CEO stayed on, especially since activist investor ValueAct is getting closer and closer at obtaining a seat on Microsoft’s board and Ballmer has always been a controversial figure among investors. Others believe that Ballmer’s poor leadership is simply to blame, and his performance metrics don’t exactly save him either.
All Things D highlighted Monday that on the day he took over as CEO in 1999, Microsoft’s market capitalization was $600 billion, and on Thursday, the day before he announced his retirement plans, it was less than $270 billion.
It’s still unclear what exactly spurned Ballmer’s departure, but more clues may be made available as the company works to replace the CEO. For now, analysts, investors, and consumers will likely hold on to every word that Gates, Ballmer, and other executives say in order to get a better idea of the tension that may be bubbling up back at Microsoft’s offices — and only time will tell if that tension eventually bubbles over.
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