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Microsoft Shuffles Leadership Team

Microsoft CEO Satya Nadella is changing up his top management team.

Microsoft CEO Satya Nadella is shuffling his top management team, announcing the departure of former Nokia boss Stephen Elop and three other top executives.

Elop had left Microsoft once before to run Nokia, then returned when Microsoft bought the Finnish company's smartphone business for $7.5 billion last year. Analysts said his departure now is a sign that Microsoft is rethinking its approach to the phone business, where it has struggled to make a profit despite recent layoffs and other spending cuts.

Also leaving the company is Mark Penn, a former Democratic political strategist who oversaw some of Microsoft's marketing efforts including the hard-hitting "Scroogled" advertising campaign that criticized products made by tech rival Google. While the campaign drew attention, industry experts said it did not appear to help Microsoft's business.

In an email to employees on Wednesday, Nadella praised the departing executives and said the reorganization will help Microsoft focus on building "services and platforms for the mobile-first, cloud-first world."

Microsoft said the "devices group" run by Elop will be folded into a new division run by Terry Myerson, an executive vice president who will also continue to oversee the company's flagship Windows operating system.

Nadella has pushed Microsoft to produce more software for mobile devices, while scaling back the smartphone hardware business since the Nokia acquisition, which was negotiated by his predecessor as CEO, Steve Ballmer.

Elop was once considered a possible successor to Ballmer, but the top job went to Nadella. Elop's departure now is further evidence that Nadella felt the strategy behind the Nokia acquisition "was clearly not heading down the right path," said investment analyst Daniel Ives of FBR Capital Markets, in an email.

Other executives will take over operations led by departing managers Kirill Tatarinov and Eric Rudder.

Nadella said Penn's departure as "chief insights officer" was unrelated to the company's reorganization. He said Penn is leaving in September to form a private equity fund.

Microsoft shares slipped 36 cents to $45.47 in afternoon trading. Microsoft shares have risen 9 percent over the past year.

AP Business Writer Damian Troise contributed to this story from New York.

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