According to the Wall Street Journal, J Allard's rumored departure from Microsoft is only the beginning of the story. It's apparently part of a planned managerial shake-up at the company's Entertainment & Devices Division -- which includes both Microsoft's Xbox business and its Windows mobile group -- and as a result of stiff competition from Apple and Google in the mobile space.
The WSJ posits that Microsoft could institute changes at the management level as early as this week. We'll keep you posted.
Source - Wall Street Journal [subscription required]