Steven Sinofsky, who had been at Microsoft since 1989 and was previously tipped as a possible replacement for chief executive Steve Ballmer, decided to step down, staff were told via email on Monday.
The shock departure, coming just two weeks after Sinofsky unveiled Microsoft’s Windows 8 software, appears to have come due to conflicts with Ballmer.
Microsoft said the move was mutual as it shakes up its management structure. It is looking to improve relations between separate parts of its business, such as Office and the hardware division, as the company puts its weight behind its new Windows 8 software and Surface tablet. Sinofsky will be replaced by Microsoft veteran Julie Larson-Green.
The move was met with dismay by Wall Street yesterday, sending shares in the company down 2.8 per cent as the market opened.
“This is shocking news,” said Brendan Barnicle, an analyst at investment bank Pacific Crest. “Like a lot of people, I thought Sinofsky was in line to potentially be Ballmer’s successor.”
Sinofsky’s departure came as the company squared up to Google in a New York court yesterday over the use of patents owned by Google’s Motorola. The landmark case, determining how much Microsoft owes Google, will be a key indicator of the value of Motorola’s patents.