Microsoft’s hardware event this September 21, 2023, has been marred with leaks of upcoming upgrades, rumors of product omissions and scaled development, and a final bombshell of the company’s hardware division jumping ship to cross town rival Amazon.
Business Insider puts all of those topics into focus with a new report that covers why Microsoft, former SVP of Devices and Services, Panos Panay, chose to leave the company after 19 years and head up the hardware and AI division of its competitor.
According to Business Insider, “Microsoft Chief Product Officer Panos Panay is leaving for Amazon after the company made budget and staff cuts, canceled products in his division, and amid discussions about a reorganization in his unit.”
People who have worked closely with Panay have said that he was unhappy with some of the recent changes and reorgs Microsoft had taken when it came to the Windows and Devices division.
At the beginning of the year, Microsoft purged over 10,000 jobs which affected a wide swath of its business sectors and divisions across the company as well saddling Panay’s department with the defunct HoloLens business which undoubtedly dragged down the departments quarterly numbers and left investors questioning hardware decisions going forward.
In addition to company restructuring, Panay’s division also received “significant cuts to simplify the Surface business that propelled Panay’s career, including canceling products like the next generation of the Surface headphones, insiders said.”
As we recently reported, Microsoft’s new plan appears to focus more on Surface “hits” rather than the arguably more fun and experimental devices they tried to push before this new focused mandate had been handed down. “Panay had recently been discussing a potential reorganization that would expand his remit through additions to his organization, but Microsoft had not carried them out.”
Microsoft’s structural changes also come at a time when the company is pivoting hard into pre-generative artificial intelligence and perhaps sees the revenue shares on software and servers more enticing than R&D on hardware that sells moderately well. As the company shifts its focus on AI, a cursory scan of the Surface line starts to make less sense for the company as well as justifying Panay’s “diva” like standards as Microsoft insiders have compared him to.
Ironically, Panay is jumping ship to Amazon to head up its also recently gutted hardware and AI division replacing hardware chief Dave Limp as part of Amazon’s senior leadership “S-team.”
Panay will seemingly have a similar uphill struggle to justify hardware development over at Amazon as he did at Microsoft and with perhaps less leeway a 19-year tenure brings, but as of now, he’ll at least have more products in varied categories to play with.