Microsoft exec exodus: Inside the departures

This year has seen an almost weekly drumbeat of senior Microsoft executives heading for the exits. Some departures have triggered sweeping reorganizations of the company’s largest divisions, while others have simply ushered in fresh faces to replace long-tenured veterans. While executive turnover at Microsoft is hardly a new phenomenon, the sheer velocity so early in the year is striking.

The rapid churn suggests a Microsoft struggling to hold onto top talent in a climate of fierce competition and a tumbling stock price. Investors have hammered Microsoft’s shares in recent weeks, with the stock dropping more than 30 percent from its peak six months ago. High-demand employees rarely stay put when their compensation shrinks or they sense the company is veering off course.

These departures have hit nearly every corner of the company, including CoreAI, Windows, Office, and GitHub. With previously unreported changes at Amazon weighing on employee morale, and GitHub’s autonomy fading, Microsoft is now overhauling its annual rewards and performance programs in a bid to stem the outflow.

The shakeup began in January when Manik Gupta, former corporate vice president of Microsoft Teams, left the company. Microsoft had hired Gupta in 2021 to spearhead a new consumer apps push involving Teams consumer, Skype, and GroupMe. Since then, Microsoft has shut down Skype in favor of Teams, while GroupMe remains a solid app that has largely failed to gain widespread recognition.

Gupta’s departure surprised me. His background running teams at Uber was supposed to help Microsoft build “world-class consumer experiences.” But convincing consumers to embrace Microsoft Teams after the pandemic peak was always going to be an uphill battle, especially given the company’s long-running struggle to win over individual users.

Just weeks later, Hayete Gallot returned to Microsoft as executive vice president of security, reporting directly to CEO Satya Nadella. This pushed former security chief Charlie Bell out of the role, a move many inside the company interpret as a direct response to Microsoft’s ongoing security struggles.

As the dust settled on the security reshuffle, an even bigger departure followed. Phil Spencer, former CEO of Microsoft Gaming, announced his retirement after nearly 40 years at the company. Spencer’s exit wasn’t entirely unexpected, but many had assumed former Xbox president Sarah Bond would succeed him. Instead, Microsoft tapped former CoreAI executive Asha Sharma to lead Xbox, prompting Bond’s resignation. Sharma is now promising “the return of Xbox,” as Microsoft belatedly realizes that Xbox is its last truly relevant consumer brand.

The Xbox shakeup hasn’t fully materialized yet, but Lori Wright, former CVP of partners and business development at Xbox, resigned shortly after Spencer and Bond’s departures. Longtime Microsoft veteran Kiki Wolfkill, former head of film and TV at Xbox, also left this week after 28 years at the company, having helped produce the Halo TV series with Paramount.

March brought another significant exit: Rajesh Jha, former executive vice president of Microsoft’s experiences and devices group, announced his retirement after more than 35 years. Jha oversaw Windows, Office, Microsoft 365 Copilot, and much more, and his departure triggered a flattening of Microsoft’s upper management. Now, the leaders of Windows, Office, and other products report directly to Nadella. Like Spencer, Jha’s retirement had been rumored internally for months, but its impact was still substantial enough to prompt further executive shuffling.

Microsoft named a new Copilot boss shortly after Jha’s announcement, with Jacob Andreou now leading the Copilot experience across both consumer and commercial segments. Different teams had been managing various parts of Copilot on the consumer and commercial sides for years, so this consolidation should ideally lead to a more unified product.

Microsoft AI CEO Mustafa Suleyman lost responsibility for consumer Copilot during this reshuffle. Microsoft is framing this as allowing him to focus on building the company’s own AI models. I suspect it’s more of an admission that consumer Copilot has failed to compete with Gemini and ChatGPT, and that Suleyman’s efforts are better spent on competing with Anthropic and OpenAI, where the stakes are higher.

The executive shakeup continued last month with the departure of Lindsay-Rae McIntyre, Microsoft’s former diversity chief, prompting HR changes as the company chases AI demand. Then earlier this month, Julia Liuson, head of Microsoft’s developer division (DevDiv), announced her resignation after 34 years. It’s unclear who will replace Liuson, if anyone, and sources I’ve spoken to at Microsoft are anxious about the inevitable organizational changes in DevDiv and the broader CoreAI division after her departure in June.

Amid these shifts, Amazon , one of Microsoft’s biggest rivals , recently announced internal changes that turn its software developers into “Builders” expected to use AI agents daily. Software management roles at Amazon are now “Builders Leads,” who will supervise both AI agents and human developers. Microsoft employees I’ve spoken to fear the company will adopt a similar model, aiming to produce even more software through AI agents. Google is also pursuing a similar path, with 75 percent of all its new code now AI-generated and approved by engineers.

I expect more GitHub changes as part of Microsoft’s continued AI push. Liuson was also responsible for overseeing GitHub revenue, engineering, and support after former GitHub CEO Thomas Dohmke resigned last year. Microsoft never replaced Dohmke, and with the rest of GitHub’s leadership now reporting directly to Microsoft’s CoreAI team, GitHub is steadily losing its independence.

Elizabeth Pemmerl, GitHub’s chief revenue officer, resigned last week, according to sources at GitHub. “After eleven years on this amazing journey, I have decided it’s the right time for the next chapter,” Pemmerl said in a message to GitHub employees. Microsoft has appointed Dan Stein, former head of software and digital platforms for Microsoft Customer and Partner Solutions (MCAPS), as the new chief revenue officer for GitHub. It’s yet another sign of Microsoft’s tightening grip.

“There’s basically no more GitHub at all anymore,” one GitHub employee told me. “It’s all Microsoft, and the company is collapsing, both in outages that are reallllly bad and have torched the company reputation… and in an exodus of leadership.”

Some of the recent departures have also handed key talent directly to competitors. Vishnu Nath, former VP and general manager of the Office product group, left last month after nearly 16 years to join Google, leading product for Google Chat. Eric Boyd, former president of AI platform at Microsoft, is now head of infrastructure at Anthropic after nearly 17 years at the company. Bobby Hollis, former VP of energy at Microsoft, also left a few weeks ago. Hollis was responsible for Microsoft’s global energy procurement and carbon removal efforts. He hasn’t announced his next move, but having previously led energy at both Facebook and Apple, his departure is another loss.

Veteran designer and engineer Haiyan Zhang also left recently to join Netflix as head of generative AI for Netflix’s games organization. After more than 28 years at Microsoft, Joy Chik is leaving in July. Chik had been president of identity and network access at Microsoft, and she’s now launching a podcast and focusing on board work and helping startup founders.

There’s no single thread connecting all these departures, since people leave for many reasons , especially high-impact employees and veterans who helped build Microsoft into the company it is today.

For the former, Microsoft is changing how it rewards employees with performance-related bonuses and stock. The company is “moving away from [stock] being directly tied to bonus,” HR chief Amy Coleman said in a memo, allowing managers to “have more flexibility to meaningfully recognize high performance.” Microsoft is also encouraging early retirement through what Coleman calls “a one-time Voluntary Retirement Program for a small percentage of our long-serving US employees.”

I expect even more long-serving employees will depart in the coming months, especially as Microsoft heads into its new financial year in July, when the company typically rolls out larger organizational shifts.