Last updated: January 11, 2011 12:37 am

Executives go at Microsoft and AMD

The mounting pressure on tech companies that thrived in the PC era, caused by a new generation of mobile devices and the rise of “cloud” computing, have led to the removal of senior executives at Microsoft and AMD.

Microsoft said on Monday that it would replace the head of its server software division in the latest round of a high-level executive shake-up that is likely to claim more heads.

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Meanwhile, AMD announced the sudden departure of its chief executive, Dirk Meyer, and said a search had begun for a replacement.

While both executives had been credited by Wall Street with solid performance, the companies said they needed different leadership for the changed times.

The departure of Bob Muglia, announced on Monday but not due to take effect until the summer, raises to four the number of executives who reported directly to Steve Ballmer, chief executive, and who have left since last May. The shake-up is part of a rethink of the senior management team as Microsoft it reacts to broader changes in the computing landscape, according to one person familiar with the changes.

By contrast, Mr Meyer’s exit took many in the chip industry by surprise. AMD’s share price has risen 97 per cent during his tenure. He spoke about the company’s future at the Consumer Electronics Show in Las Vegas last week.

The company said he had resigned in a mutual agreement with the board. Thomas Seifert, chief financial officer, will take over as interim chief executive.

Bruce Claflin, AMD chairman, said the company needed to show significant growth, establish market leadership and generate superior financial returns. “We believe a change in leadership at this time will accelerate the company’s ability to accomplish these objectives,” he said.

Mr Ballmer, meanwhile, hinted that the shift to cloud computing had prompted him to replace Mr Muglia. In an internal memo, Mr Ballmer said: “All businesses go through cycles and need new and different talent to manage through those cycles.”

A low-key figure, Mr Muglia drew heavy criticism from developers in October when he suggested that Microsoft would put less emphasis on Silverlight, an important technology that it had been promoting for developing web services. Mr Muglia was later forced to retract his comments. Microsoft has yet to pick a replacement for Mr Muglia.

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