Well, it looks like the rumors were true. Not only is Microsoft's J Allard now officially leaving the company, but so is Robbie Bach, President of Microsoft's Entertainment & Devices Division, amid what's described as a broader restructuring that will effectively dissolve the division and give CEO Steve Ballmer more direct oversight of Microsoft's consumer initiatives like Xbox and Windows Phone as of July.

Contrary to earlier reports, Allard says that he's not leaving due to the cancellation of the Courier, but instead says that after nineteen years with the company, he simply wants to devote more time to his personal interests, "particularly adventure sports." Allard also insists that he won't be moving on to Apple, Google or any other Microsoft rivals -- in fact, he's staying on as an advisor to Steve Ballmer. Robbie Bach's departure is equally curious -- despite being just 48, his move is being described as a "retirement," and he says that the decision was his own and that he wasn't encouraged to leave. He'll also apparently remain with Microsoft through the fall to aid in the transition.

When all's said and done, mobile communications VP Andy Lees and interactive entertainment head Don Mattrick will each separately report to Ballmer -- both have headed their divisions for some time now, so we'd assume that things will otherwise proceed as planned. Still, the loss of talent at the top is certainly noticeable -- we'll see how Microsoft responds now that Ballmer is firmly driving its mobile and gaming efforts.

We've got Ballmer's full letter to the company and Microsoft's official PR after the break, so take a peek.

Update: Mary Jo Foley has J Allard's parting email to his employees.
Show full PR text
Microsoft Announces Retirement and Transition Plan for Robbie Bach

Don Mattrick and Andy Lees will now report to CEO Steve Ballmer to continue Microsoft's momentum in Interactive Entertainment and Mobile Communications.

REDMOND, Wash. - May 25, 2010 - Microsoft Corp. today announced that Robbie Bach, president of the Entertainment and Devices (E&D) Division, will retire from the company this fall.

Underscoring the strength of the leadership teams in place for the entertainment and mobile businesses, the company announced that Senior Vice President Don Mattrick will continue to lead the Interactive Entertainment Business and Senior Vice President Andy Lees will continue to lead the Mobile Communications Business. Each will report directly to CEO Steve Ballmer effective July 1.

"For the past 22 years, Robbie has personified creativity, innovation and drive. With this spirit, he has led a division passionately devoted to making Microsoft successful in interactive entertainment and mobility," Ballmer said. "Robbie's an amazing business person and close personal friend, which makes his departure a point of sadness for me. However, given the strong leadership team he has built, the business performance of E&D this year and the launches of Windows Phone 7 and 'Project Natal' this fall, we are set up well for success as we continue to drive our mobile and entertainment businesses forward."

"At Microsoft, I've been so fortunate to spend more than two decades of my life working with incredible people and doing amazing things like launching Office, Xbox and Xbox Live, the 'Halo' franchise, Windows Phones, Zune and more," said Bach, who joined the company in 1988. "I'm at the time in my life where I want to dedicate more time to my family and my nonprofit work, including my work with the Boys & Girls Clubs of America. I have the utmost confidence in Steve, Don and Andy and their ability to see through our mission of bringing extraordinary entertainment and mobility experiences to life for people around the world."

Bach will remain with Microsoft through the fall, working with Ballmer and his leadership team to ensure a smooth transition.

Mattrick has led the Interactive Entertainment Business since July 2007, overseeing the evolution of Xbox Live, the launch of blockbusters such as "Halo 3" and the much-anticipated "Project Natal." Under Mattrick's leadership, the global Xbox installed base has grown to more than 40 million consoles and Xbox Live now has more than 23 million members. Previously, Mattrick served as president of Electronic Arts Worldwide Studios.

Microsoft also announced that David Treadwell, corporate vice president of Live Platform Services, will take a new position leading the core technology organization for the Interactive Entertainment Business, reporting to Mattrick.

Lees has led the Mobile Communications Business since February 2008 and has been instrumental in reinvigorating Microsoft's mobility efforts, bringing in new business and development talent and overseeing the creation of both KIN and Windows Phone 7. A 20-year Microsoft veteran, he previously served as corporate vice president for Server & Tools marketing and sales, led a variety of worldwide sales and marketing functions, and began his career in Microsoft's U.K. subsidiary.

"One measure of a leader is the team he assembles around him, and Robbie built an incredible team. Don and Andy are exactly the right leaders to carry our entertainment and mobility efforts forward," Ballmer said.

Microsoft also announced that J Allard, senior vice president of Design and Development for E&D, will be leaving Microsoft after 19 years, and will take an official role as an advisor in a strategic role for Ballmer and his leadership team.

"J has brought a game-changing creative magic to Microsoft for years, from Windows to Xbox, from Zune to KIN," Ballmer said. "He was one of the key drivers in our early work on the Web, and we're absolutely delighted that J's role with the company will evolve in a way that lets all of Microsoft benefit from his business insight, technical depth and keen eye for consumer experience."

In other organization moves, following the successful launch of Office 2010, Antoine Leblond, senior vice president in the Office Productivity Applications Group, will take a new role as senior vice president for the Windows Web Services team. This team brings together the integral Windows services that today deliver updates, solutions, community and depth information for the Windows consumer. Kurt DelBene, senior vice president in the Office Business Productivity Group, will take on all of the engineering responsibilities for the Office business.

Founded in 1975, Microsoft (Nasdaq "MSFT") is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

Note to editors: For more information, news and perspectives from Microsoft, please visit the Microsoft News Center at http://www.microsoft.com/news. Web links, telephone numbers and titles were correct at time of publication, but may have changed. For additional assistance, journalists and analysts may contact Microsoft's Rapid Response Team or other appropriate contacts listed at http://www.microsoft.com/news/contactpr.mspx.

From: Steve Ballmer
Sent: Tuesday, May 25, 2010 11:01 AM
To: Microsoft - All Employees (QBDG)
Subject: Executive Leadership Transitions

After almost 22 years with the company, Robbie Bach has decided to retire from Microsoft. I have worked with Robbie during his entire tenure at Microsoft, and count him as both a friend and a great business partner and leader. Robbie has always had great timing, and is going out on a high note - this has been a phenomenal year for E&D overall, and with the coming launches of both Windows Phone 7 and "Project Natal," the rest of the year looks stupendous as well. While we are announcing Robbie's retirement today, he will remain here through the fall, ensuring we have a smooth transition.

Concurrent with Robbie's retirement, I am making several organization changes to ensure we have the right leaders in the right positions as we set ourselves up for the next big wave of products and services. Effective July 1, Don Mattrick, who leads our interactive entertainment business, and Andy Lees, who leads our mobile communications business, will report directly to me. Don and Andy have built out strong leadership teams and product pipelines, and are well-positioned for the years ahead.

Independent of Robbie's decision, J Allard (currently serving as senior vice president of Design and Development for E&D), will also be leaving Microsoft. Given his ongoing passion and commitment to Microsoft, he will remain as an advisor to me, helping incubation efforts, looking at design and UI, and providing a cross-company perspective on these and similar topics. With J's change in role, corporate vice president David Treadwell will join IEB to lead the core technology organization, reporting to Don. David has a great set of accomplishments at Microsoft, most recently working on the Windows Live Platform Services team. Over the next several months, Robbie and I will work together to finalize reporting and structure for the rest of his org.

Now that Office 2010 has been launched to business customers, Antoine Leblond, senior vice president in the Office Productivity Applications Group, will take a new role as senior vice president for the Windows Web Services team. This team brings together the integral Windows services that today deliver updates, solutions, community and depth information for the Windows consumer. Kurt DelBene, senior vice president in the Office Business Productivity Group, will take on all of the engineering responsibilities for the Office business.

Transitions are always hard. Robbie has been an instrumental part of so many key moments in Microsoft history - from the evolution of Office to the decision to create the first Xbox to pushing the company hard in entertainment overall. J as well has had a great impact in the market and on our culture, providing leadership in design, and in creating a passionate and involved Xbox community, and earlier being at the center of our work seizing the importance of the Web for the company. But most important, both have been great team builders with a strong record of attracting, coaching and growing talent. As a result, their teams are primed to continue to step up and deliver great products, great services and great results for the company. Don has led the Interactive Entertainment Business since July 2007, where he's significantly grown our entertainment footprint as well as our profitability. He can count as successes the evolution of Xbox Live, the launch of blockbusters like "Halo 3" and the much-anticipated "Project Natal." Previously, Don was president of Electronic Arts Worldwide Studios. Andy has led the Mobile Communications Business since February, 2008, and has been instrumental in reinvigorating our mobility efforts, bringing in new business and development talent and overseeing the creation of both KIN and Windows Phone 7.

As we finalize and ship so many of our key products ("Project Natal," Windows Phone 7, Office 2010, Windows Live Wave 4 and others) it is a natural time for us to look ahead and make sure we have the right talent in the right roles to fuel our next set of offerings. I am confident that the changes above will set us up well for the months and years ahead.

I want to close by thanking Robbie for the incalculable contributions he has made to Microsoft over the years. He will be greatly missed when he retires this fall, and I am glad that I'll have the opportunity to continue working closely with him between now and then. And as J makes a similar transition, I look forward to working with him in a new way.

Steve

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Microsoft's Robbie Bach and J Allard leaving as part of broader shakeup; Xbox and Windows Phone teams now reporting directly to Ballmer