Amidst sagging PC sales, a sluggish response to the Surface and struggles to gain traction in the smartphone market, Microsoft announced today that CEO Steve Ballmer will be retiring. Ballmer, who is expected to step down within the next 12 months, has been with the company since 1980 when he worked as the company's first business manager. He will not retire until a new CEO has been appointed.
“There is never a perfect time for this type of transition, but now is the right time,” Ballmer said in a press release. “We have embarked on a new strategy with a new organization and we have an amazing Senior Leadership Team. My original thoughts on timing would have had my retirement happen in the middle of our company’s transformation to a devices and services company. We need a CEO who will be here longer term for this new direction.”
The search for a new CEO will be directed by a special committee formed by Microsoft's Board of Directors and chaired by John Thompson. Chairman of the Board Bill Gates will sit on the committee. An executive recruiting firm will assist in the search that will look by internally and externally.
“As a member of the succession planning committee, I’ll work closely with the other members of the board to identify a great new CEO,” said Gates. “We’re fortunate to have Steve in his role until the new CEO assumes these duties.”
According to analysts at IDC, Microsoft's latest operating system, Windows 8, could be the reason for flailing PC sales of late. In the first quarter of this year, global PC shipments fell 13.9 percent, In Q2 that number dropped to 15.4 percent.
PC sales are hardly the only problem Microsoft faces. Return rates of the Microsoft Surface RT tablet are estimated at around 55 percent, and, while Windows Phone sales are the highest they have been in 3 years, the mobile operating system still only accounts for 4 percent of the smartphone market.