Nadella dismantles – Microsoft CEO Satya Nadella is reshaping the company for the AI era by retiring its senior leadership team, replacing long-running executive structures with smaller, flatter groups, and promoting leaders closer to engineering and product work. The changes span
For years, Microsoft’s senior leaders ran sprawling businesses from the top of the hierarchy. Now that old architecture is being quietly dismantled. Satya Nadella has retired the structure known as the senior leadership team. or SLT. and replaced it with smaller. flatter groups closer to the work—an internal shift designed to help the 220. 000-person company move at the speed of the AI race.
The urgency is not theoretical. Microsoft’s stock had its worst quarter since the 2008 financial crisis as the company faces investor pressure to show that the hundreds of billions of dollars it invested in AI will pay off. Inside the company. people close to Nadella say the pace of the platform shift is happening faster than anything they’ve seen. and that Microsoft “can’t afford” to be slow.
Nadella’s push goes beyond reshuffling titles. He has been rebooting Microsoft’s approach to the AI era for the past year. studying startups because Microsoft’s size has become “a massive disadvantage” in the AI era. The moves are aimed at compressing decision-making and improving how information flows to the people who need it when technology changes week to week.
Nadella freed up time for technical work by appointing a new CEO of Microsoft’s commercial business in October. In November, he tapped a new AI advisor to help reinvent the company’s business model for the AI era. At the same time. an internal campaign asked executive leaders to sign on for a significant amount of work and a new. more demanding culture—or leave. as reported in December.
The company’s new “rules of the room” show up in how leadership is organized. Corporate leadership now meets at least weekly and focuses on companywide corporate operations and governance. That group includes Nadella. Microsoft President Brad Smith. Chief Financial Officer Amy Hood. Chief People Officer Amy Coleman. and Commercial CEO Judson Althoff.
Engineering is getting its own more direct channel. Nadella operates an engineering leadership group of roughly 35 engineering and product leaders. People close to Nadella say the structure resembles a startup-style operating model Nadella has publicly praised: engineers. researchers. product builders. and designers working in close coordination rather than through large managerial chains. Nadella also personally reviews AI metrics every week.
A separate Copilot leadership team meets weekly in a standup with Nadella. It is made up of Charles Lamanna, Jacob Andreou, and Ryan Roslansky. Lamanna oversees the Copilot platform. Andreou, who joined Microsoft only last year, focuses on the user interface. Roslansky—previously CEO of LinkedIn and now running large parts of Microsoft’s Office business—is in charge of applications.
Other parts of the engineering machine are being pulled closer as well. Nadella meets with the Azure cloud-computing infrastructure leadership team every two weeks.
One of the rising stars inside engineering leadership is a long-time Microsoft veteran named Arun Ulag. In April. Ulag was promoted to EVP. expanding his role beyond running the data analytics platform Fabric to include a larger role in the company’s overall strategy. While Ulag reports to cloud boss Scott Guthrie, one person said Nadella treats him more like a direct report.
The reorganization is also meant to bring more ideas from the inside out. Nadella expanded the accelerator meetings he started last year. In those meetings, executives take a back seat as rank-and-file workers surface ideas and explain what they’re seeing from the trenches.
Pavan Davuluri is emerging as another trusted operator in Nadella’s orbit. The 25-year Microsoft veteran who worked on Microsoft’s original team responsible for its line of Surface hardware products has led the group responsible for Windows and devices since March. Alongside Lamanna. Andreou. and Roslansky. Davuluri is among the names people described as central to how Nadella is running this new push.
A key part of the shake-up is who gets to keep influence—and who doesn’t. As new leaders rise into the tighter structure Nadella wants, longtime Microsoft power brokers have transitioned out of roles, into reduced roles, or into focused responsibilities.
DeepMind cofounder and Microsoft CEO Mustafa Suleyman—hired in 2024 to lead a newly created AI division—now has a narrower role that oversees roughly 650 employees. Suleyman remains close to Nadella and is focused on the company’s superintelligence group. Kevin Scott. Microsoft’s chief technology officer and a central architect of its AI vision. remains a close advisor to Nadella.
Yusuf Mehdi. a 35-year Microsoft veteran who has been the company’s commercial chief marketing officer since 2023. announced on Thursday that he is leaving the company. He will transition to a role where he will “help reimagine Windows for the agentic era” through the next fiscal year. according to a memo viewed by Business Insider.
Rajesh Jha, one of Microsoft’s most influential product leaders for years, is set to retire when Microsoft’s next fiscal year begins on July 1.
Some longtime leaders may remain in advisory or transitional capacities for six to 12 months after operational control shifts. One person said the goal is to avoid abruptly losing institutional knowledge: “Satya does not want to abruptly lose that institutional knowledge.”
Even the security organization has been reshaped. Charlie Bell—widely considered one of the architects of Amazon Web Services and who joined Microsoft in 2021 to oversee a massive security organization of 10. 000—now is listed as simply “engineer” with zero reports on a recent organizational chart viewed by Business Insider. Bell was replaced as executive vice president of security earlier this year by Hayete Gallot. a former Microsoft executive who had briefly left for Google Cloud.
In an internal memo announcing the change. Nadella praised Gallot’s blend of engineering and customer-facing experience. saying she brought “an ethos that combines product building with value realization for customers.” One person familiar with the changes said Gallot has a “deep connection” with Microsoft customers and is in Nadella’s inner circle.
No department better captures the disruption than gaming.
In February, Microsoft named Asha Sharma as CEO of Microsoft Gaming, replacing longtime Xbox leader Phil Spencer. Sharma had joined Microsoft’s Core AI group in 2024 after leadership roles at Instacart and Meta. The move stunned many employees because Sharma had relatively limited experience in the gaming industry compared with other internal candidates.
People familiar with Nadella’s thinking said he had been mentoring Sharma privately and viewed her as a leader capable of modernizing Microsoft’s gaming business. The appointment also signaled Nadella’s willingness to elevate outsiders and newer executives over long-tenured Microsoft veterans.
Sarah Bond. another prominent gaming executive viewed by some as a possible successor. left the role after the announcement but is now a “special advisor” to Sharma. Spencer was still listed as reporting to Nadella in the organization chart Business Insider viewed. but the transition had already happened. “Asha is off and running,” one of the people said.
The sequence of moves—retiring SLT. pushing weekly and biweekly leadership check-ins. expanding idea-generating meetings. and elevating newer operators over long-tenured executives—has been building toward one target: making Microsoft more agile without losing its institutional depth. The pressure behind it is visible in markets and in the clock of technology. with investors demanding proof that the company’s enormous AI investment will translate into results.
For now, Microsoft’s leadership map is being redrawn in real time: Copilot gets its own standup. Azure gets tighter infrastructure oversight. Engineering leadership is designed like a startup machine. Gaming leadership is handed to someone from outside the traditional gaming track. And across the company, executives are being asked to trade familiar distance for proximity to the work.
Satya Nadella Microsoft reorganization AI reboot SLT Copilot leadership team Azure leadership Microsoft gaming Asha Sharma Mustafa Suleyman Yusuf Mehdi Charlie Bell Hayete Gallot investor pressure