Father of the Xbox, Head of Gadgets and Fun Leave Microsoft [Update]

Sources have confirmed to Kotaku that both Robbie Bach, the current head of all things entertainment for Microsoft, and J. Allard, one of the top men behind the Xbox and Xbox 360, are leaving Microsoft.

In a memo this morning to Microsoft employees obtained by Kotaku, Microsoft CEO Steve Ballmer announced that the two were "retiring" from the company.

Ballmer says that after 22 years with Microsoft, Bach, the president, of Microsoft's entertainment and devices division, is leaving Microsoft on a high note. "This has been a phenomenal year for E&D overall, and with the coming launches of both Windows Phone 7 and "Project Natal," the rest of the year looks stupendous as well." He will remain with Microsoft until the fall.

"At Microsoft, I've been so fortunate to spend more than two decades of my life working with incredible people and doing amazing things like launching Office, Xbox and Xbox Live, the ‘Halo' franchise, Windows Phones, Zune and more," Bach said in a prepared statement. "I'm at the time in my life where I want to dedicate more time to my family and my nonprofit work, including my work with the Boys & Girls Clubs of America. I have the utmost confidence in Steve, Don and Andy and their ability to see through our mission of bringing extraordinary entertainment and mobility experiences to life for people around the world."

Ballmer also confirmed rumors that J. Allard, the company's chief experience officer and chief technology officer of the entertainment and devices division, is leaving the company after 15 years. Allard will continue to work as an advisor to Ballmer, "helping incubation efforts, looking at design and UI, and providing a cross-company perspective on these and similar topics."

Allard was spotted over the weekend at a New York restaurant, but at the time we were told he was on sabbatical.

The loss of two key personnel from Microsoft's entertainment and devices division, the unit responsible for things like the mobile phones, the Xbox 360 and Zune, comes at a time when the company is facing daunting competition from the likes of Apple, Google, Nintendo and Sony. The shakeup could be a sign that the company recognizes the need for a shake up in a division that brought in $1.67 billion in sales in the first quarter of the year.

According to the memo obtained by Kotaku, Don Mattrick, who leads Microsoft's interactive entertainment business, and Andy Lees, who leads Microsoft's mobile communications business, will report directly to Ballmer starting in July. Meanwhile corporate vice president David Treadwell will now report to Mattrick.

The rest of the reorg chart won't be ready for printing until later in the year, after Bach and Ballmer have a chance to figure out who should be doing what.

In his morning bombshell, Ballmer praises both Bach and Allard for helping push Microsoft into the entertainment industry and changing the company's culture.

"I want to close by thanking Robbie for the incalculable contributions he has made to Microsoft over the years. He will be greatly missed when he retires this fall, and I am glad that I'll have the opportunity to continue working closely with him between now and then," Ballmer writes. "And as J makes a similar transition, I look forward to working with him in a new way."

Update: Microsoft has confirmed the departure of Bach. Canned quotes from the departing exec added up in the story.

Make sure to check out our memory-filled retrospective on Allard and his time at Microsoft.

The Full Memo

From: Steve Ballmer
Sent: Tuesday, May 25, 2010 11:01 AM
To: Microsoft - All Employees (QBDG)
Subject: Executive Leadership Transitions

After almost 22 years with the company, Robbie Bach has decided to retire from Microsoft. I have worked with Robbie during his entire tenure at Microsoft, and count him as both a friend and a great business partner and leader. Robbie has always had great timing, and is going out on a high note - this has been a phenomenal year for E&D overall, and with the coming launches of both Windows Phone 7 and "Project Natal," the rest of the year looks stupendous as well. While we are announcing Robbie's retirement today, he will remain here through the fall, ensuring we have a smooth transition.

Concurrent with Robbie's retirement, I am making several organization changes to ensure we have the right leaders in the right positions as we set ourselves up for the next big wave of products and services. Effective July 1, Don Mattrick, who leads our interactive entertainment business, and Andy Lees, who leads our mobile communications business, will report directly to me. Don and Andy have built out strong leadership teams and product pipelines, and are well-positioned for the years ahead. Independent of Robbie's decision, J Allard (currently serving as senior vice president of Design and
Development for E&D), will also be leaving Microsoft. Given his ongoing passion and commitment to Microsoft, he will remain as an advisor to me, helping incubation efforts, looking at design and UI, and providing a cross-company perspective on these and similar topics. With J's change in role, corporate vice president David Treadwell will join IEB to lead the core technology organization, reporting to Don. David has a great set of accomplishments at Microsoft, most recently working on the Windows Live Platform Services team. Over the next several months, Robbie and I will work together to finalize reporting and structure for the rest of his org.

Now that Office 2010 has been launched to business customers, Antoine Leblond, senior vice president in the Office Productivity Applications Group, will take a new role as senior vice president for the Windows Web Services team. This team brings together the integral Windows services that today deliver updates, solutions, community and depth
information for the Windows consumer. Kurt DelBene, senior vice president in the Office Business Productivity Group, will take on all of the engineering responsibilities for the Office business.

Transitions are always hard. Robbie has been an instrumental part of so many key moments in Microsoft history - from the evolution of Office to the decision to create the first Xbox to pushing the company hard in entertainment overall. J as well has had a great impact in the market and on our culture, providing leadership in design, and in creating a passionate and involved Xbox community, and earlier being at the center of our work seizing the importance of the Web for the company. But most important, both have been great team builders with a strong record of attracting, coaching and growing talent. As a result, their teams are primed to continue to step up and deliver great products, great services and great results for the company. Don has led the Interactive Entertainment Business since July 2007, where he's significantly grown our entertainment footprint as well as our profitability. He can count as successes the evolution of Xbox Live, the launch of blockbusters like "Halo 3" and the much-anticipated "Project Natal." Previously, Don was president of Electronic Arts Worldwide Studios. Andy has led the Mobile Communications Business since February, 2008, and has been instrumental in reinvigorating our mobility efforts, bringing in new business and development talent and
overseeing the creation of both KIN and Windows Phone 7.

As we finalize and ship so many of our key products ("Project Natal,"Windows Phone 7, Office 2010, Windows Live Wave 4 and others) it is a natural time for us to look ahead and make sure we have the right talent in the right roles to fuel our next set of offerings. I am confident that the changes above will set us up well for the months and years ahead.

I want to close by thanking Robbie for the incalculable contributions he has made to Microsoft over the years. He will be greatly missed when he retires this fall, and I am glad that I'll have the opportunity to continue working closely with him between now and then. And as J makes a similar transition, I look forward to working with him in a new way.

Steve