Steve Ballmer has announced that he will be stepping down as chief executive of Microsoft within the next 12 months.
"There is never a perfect time for this type of transition, but now is the right time," he said in a statement. "We need a CEO who will be here longer term for this new direction."
Ballmer will retire once a suitable successor has been found. Microsoft has set up a special committee to find his replacement. This committee includes Microsoft founder Bill Gates, who Ballmer succeed as CEO in 2000.
Microsoft has come under fire recently for not reacting quickly enough to the way Apple and Google have led the way in mobile devices. It has struggled to keep up in sales as consumers begin to favour tablets over desktop computers.
While its Windows software is used on the vast majority of PCs, Microsoft has made little impact in the fast-growing tablet and smartphone segments.
Ballmer is currently leading a transition to help Microsoft emerge in the devices and services sector. In a memo to staff last month, Mr Ballmer said that the changes meant the company was "rallying behind a single strategy as one company - not a collection of divisional strategies".
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