Microsoft Windows boss Panos Panay left for Amazon after cuts and canceled products in his unit, insiders say

• Microsoft this week announced Chief Product Officer Panos Panay left after nearly 20 years.
• Panay is expected to take over for Amazon’s retiring head of devices Dave Limp.
• Insiders say Panay’s exit comes after Microsoft made cuts and canceled products in his unit.

Microsoft Chief Product Officer Panos Panay is leaving for Amazon after the company made budget and staff cuts, canceled products in his division, and discussed a reorganization in his unit.

Panay, a 20-year Microsoft veteran and creator of the company’s Surface line of laptops and tablets, left the company unexpectedly just days before he was set to unveil new Surface models at a Thursday event in New York.

Soon after Panay’s departure was announced, Bloomberg reported that Amazon had hired Panay to replace Dave Limp, the company’s retiring head of devices. Microsoft, Panay, and Amazon all declined to comment.

Insiders who have worked closely with Panay said he was dissatisfied with recent changes in the Windows + Devices division he ran and had long been rumored to be considering a move to Amazon. The insiders requested anonymity because they are not authorized to speak to the press, but their identities were revealed to Insider.

Panay was notably in charge of the team that developed the Surface hardware business during his nearly 20-year tenure at Microsoft. Panay was named Microsoft’s chief product officer in 2018 and put in charge of a new organization called Windows + Devices in 2020, which expanded to include the HoloLens mixed reality-hardware business in 2022.

According to insiders, Windows licensing and the unit’s hardware underperformed relative to the company’s financial projections, and Microsoft responded by drastically reducing Panay’s division.

According to insiders, the company has made significant cuts to simplify the Surface business that propelled Panay’s career, including canceling products such as the next generation of Surface headphones. According to the sources, the plan is to focus on Microsoft’s hits rather than the more experimental devices that the company funded during times of prosperity. Panay had recently discussed a potential reorganization that would broaden his remit through organizational additions, but Microsoft had not implemented them, according to two of the people.

Such changes are taking place throughout the company in support of Microsoft’s artificial intelligence ambitions, leaving many senior company leaders facing significant layoffs.

Insiders say Panay was a demanding leader at Microsoft who demanded “white glove service” on everything, referring to a premium experience with extra care and attention to detail. Panay was “really exacting on wanting the end-to-end experience to be beautiful and having high standards,” according to one person who worked closely with Panay for years. “He was a bit of a diva,” said another.

While demanding, Panay was also well-liked at Microsoft and had a team with reports who had been with him for more than a decade, which is usually a good indicator of an executive’s management style but is more common at Microsoft where employees have long tenures.

While it may come as a surprise to some, Panay’s move to Amazon is understandable given his passion for consumer goods, according to sources. Surface has been successful in comparison to many of Microsoft’s consumer hardware products, but it still competes in a vastly different PC market.

Amazon has a larger number of popular consumer devices on the market, such as its Kindle reading tablet, smart home devices with Alexa voice assistant, and smart cameras such as Blink.

Still, Amazon’s devices division has had its own recent struggles, and it’s unclear how Panay will fit in, according to sources. “Devices at Amazon is a slog, and they won’t accommodate him as Microsoft did,” one of the sources said.

Amazon gutted its Alexa division late last year, according to an insider, and Reuters just reported that recent cuts have resulted in a weakened development pipeline. Amazon spokesperson Kristy Schmidt declined to comment on Panay’s departure, but stated that the company is optimistic about its hardware product roadmap.

Panay’s departure from Microsoft is the largest between the two companies since Charlie Bell, a cofounder of Amazon’s cloud business, joined Microsoft in 2021.

Panay is a member of Microsoft’s senior leadership team and was promoted to executive vice president in 2021, but according to a recent organizational chart viewed by Insider, he still reports to another EVP, Rajesh Jha, rather than CEO Satya Nadella. That, however, was not unusual. At least two members of Microsoft’s SLT continue to report to executives other than Nadella.

Limp, the Amazon executive Panay is expected to succeed, is on the company’s senior leadership “S-team,” but it’s unclear whether Panay will join that high-level team, as new hires are rarely added to it right away.