The shock announcement comes just weeks after Ballmer, who became Microsoft’s first business manager when Bill Gates hired him 33 years ago, drafted a major business reorginisation to bring all divisions under one united strategy.
“There is never a perfect time for this type of transition, but now is the right time,” Ballmer said. “We have embarked on a new strategy with a new organisation, 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.”
Microsoft’s board of directors has appointed a special committee to lead the process of choosing the new CEO, which will happen in the next year. In the meantime, Ballmer will continue to lead Microsoft through the next steps of its transformation to a devices and services company.
The committee is chaired by John Thompson, the board’s lead independent director, and includes the Chairman of the Board himself, Bill Gates, Chairman of the Audit Committee, Chuck Noski, and Chairman of the Compensation Committee, Steve Luczo.
The special committee is working with Heidrick & Struggles International Inc., a leading executive recruiting firm, and will consider both external and internal candidates.
“The board is committed to the effective transformation of Microsoft to a successful devices and services company,” Thompson said. “As this work continues, we are focused on selecting a new CEO to work with the company’s senior leadership team to chart the company’s course and execute on it in a highly competitive industry.”
Gates added Microsoft was “fortunate” that Ballmer will continue with his duties until the new CEO takes over. “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,” he said.
During his time at Microsoft, Ballmer headed several divisions, including operations, operating systems development, and sales and support. He became President in 1998, before officially taking on the title of CEO in January 2000.