Microsoft CEO Satya Nadella has quietly dismantled the senior leadership structure that has run Microsoft for decades, creating a new inner circle built to compete in the AI era—and it marks the most dramatic internal shake-up the company has seen in years. According to Business Insider, which spoke to people close to the CEO and reviewed internal documents, Nadella has retired what insiders call the SLT—the senior leadership team of powerful executives who ran sprawling businesses and reported directly to him. In its place are smaller, flatter teams that sit much closer to the actual work. “We quietly retired what’s known as the SLT,” one person told Business Insider. The goal is speed. As one person close to Nadella put it, the pace of the AI shift is faster than anything they’ve seen, and Microsoft “can’t afford” to be slow.The urgency isn’t hard to understand. Microsoft’s stock had its worst quarter since the 2008 financial crisis, and investors want proof that the hundreds of billions poured into AI will actually pay off. Nadella, meanwhile, has been openly studying startups, and recently admitted that Microsoft’s sheer size has become “a massive disadvantage.”
How Nadella is rebuilding Microsoft to move like a startup
Three new structures now run the show. A five-person corporate leadership group—Nadella, Brad Smith, Amy Hood, Amy Coleman and Judson Althoff—meets weekly to handle governance. An engineering leadership group of roughly 35 product and engineering leaders works in tight coordination instead of through long managerial chains. And a dedicated Copilot team of three—Charles Lamanna, Jacob Andreou and Ryan Roslansky—meets Nadella in its own weekly standup. Nadella now personally reviews AI metrics every week and checks in with the Azure infrastructure team every fortnight.The reshuffle follows a year-long campaign in which Nadella reportedly asked leaders to either commit to a tougher, more demanding culture or step aside. Plenty chose the exit.
Why some of Microsoft’s biggest names are stepping back
The casualty list is long and notable. Rajesh Jha, one of Microsoft’s most influential product leaders, retires on 1 July. Yusuf Mehdi, a 35-year veteran and consumer chief marketing officer, is leaving. Charlie Bell, once seen as an architect of Amazon Web Services, is now listed simply as “engineer” with zero reports on an internal org chart, per Business Insider.Even Mustafa Suleyman, the DeepMind co-founder Nadella hired in 2024 to lead a new AI division, now oversees a narrower group of around 650 people focused on superintelligence. The most surprising move came in gaming, where Asha Sharma—a Core AI executive with limited gaming experience—replaced longtime Xbox boss Phil Spencer after Nadella mentored her privately.Rising names include Arun Ulag, promoted to EVP in April, and Pavan Davuluri, now running Windows and devices. The thread connecting all of it is simple. Nadella is trying to make a 220,000-person company behave like a 35-person engineering team. Whether it works is a question Microsoft’s stock price will eventually answer.
