Microsoft’s upcoming hardware event on September 21, 2023, has been hit with a series of leaks and rumors. To add to the chaos, the company’s hardware division has made a surprising move by joining forces with rival Amazon.
Business Insider has released a report that sheds light on the reasons behind Panos Panay’s departure from Microsoft. Panay, the former SVP of Devices and Services, has chosen to lead Amazon’s hardware and AI division after 19 years at Microsoft.
According to Business Insider, Panay’s decision was influenced by budget cuts, staff reductions, and product cancellations within Microsoft. The company was also undergoing discussions about a reorganization in Panay’s unit, which further contributed to his dissatisfaction.
Sources close to Panay revealed that he was unhappy with the recent changes and reorganizations within Microsoft’s Windows and Devices division. Earlier this year, Microsoft eliminated over 10,000 jobs, affecting various sectors and divisions, including Panay’s department. Additionally, the defunct HoloLens business weighed down the department’s quarterly numbers, raising concerns among investors about future hardware decisions.
Furthermore, Panay’s division faced significant cuts as part of the company’s efforts to streamline the Surface business. This included canceling products like the next generation of Surface headphones. Microsoft’s new strategy focuses on prioritizing successful Surface devices rather than experimental ones.
Microsoft’s structural changes coincide with its increased focus on pre-generative artificial intelligence. The company may find software and server revenue more enticing than investing in moderately successful hardware. As Microsoft shifts its attention to AI, the Surface line’s relevance becomes less clear, and Panay’s high standards have been compared to those of a “diva” by insiders.
Ironically, Panay will now be leading Amazon’s recently restructured hardware and AI division, replacing Dave Limp as part of Amazon’s senior leadership “S-team.” Although Panay may face similar challenges in justifying hardware development at Amazon, he will have a wider range of product categories to work with.
Overall, Microsoft’s hardware event is surrounded by leaks and rumors, with Panay’s departure to Amazon adding another unexpected twist to the story.