Exclusive: Top Execs Bates and Reller to Depart, as Musical Chairs Begins at Microsoft

Two direct reports to new Microsoft CEO Satya Nadella — EVP of business development and evangelism Tony Bates and EVP of marketing Tami Reller — are leaving the company, according to numerous sources close to the situation.

It’s not clear where either exec is headed, if anywhere immediately. But Nadella told top staff of the changes on Friday; the software giant was planning to announce them Tuesday.

Sources added that EVP of advanced strategy Eric Rudder will temporarily take up Bates’ duties, and longtime Microsoft marketing exec Chris Capossela will replace Reller.

Interestingly, Capossela will get all of advertising, too, in a major shift in the duties of EVP of advertising and strategy Mark Penn to just EVP of strategy. As I reported earlier this week, Penn has been a much discussed figure inside Microsoft.

Apparently, Penn will get more strategery duties — if you spin it one way for the controversial former political operative, it is a promotion, and if you spin it another, it’s a demotion. In the new set-up, he will apparently look at new product areas and strategic investments for Microsoft. So, overall, it seems like a pretty lateral move to me, but with less teeth (and Penn can sure bite!).

In any case, Penn will remain on the Senior Leadership Team, called SLT inside the company, for those who report directly to Nadella. The longtime friend of former Microsoft CEO Steve Ballmer came to Microsoft in 2011, first as a strategist.

Reller’s departure was not unexpected, given she had been matched by Ballmer in a classic and problematic two-in-a-box face-off with Penn, a set-up that had become uncomfortable and, increasingly, untenable. As I wrote: “Reller took the job, of course, knowing the score, but apparently was focused on balancing Penn’s more aggressive tendencies.”

Reller is one of the top women leaders at Microsoft, reporting to Nadella; others include EVP of HR Lisa Brummel and CFO Amy Hood, who are expected to remain in their jobs. Julie Larson-Green, who has been EVP of devices and studios, will be moving to another job under EVP of applications and services Qi Lu (more on his ascension in the Nadella regime soon!). She will not stay on SLT, as had been previously planned, after Nokia exec Stephen Elop arrives to take over that unit.

Reller has been at Microsoft since 2001, working in a number of jobs, including as CMO and CFO for its flagship Windows unit. She came to Microsoft after its acquisition of Great Plains Software, where she had worked since 1984 while still in college.

Sources said she will stay for a while to help with the transition.

Bates will leave immediately, but his departure is also not a huge surprise, given he was one of the internal candidates for CEO. He apparently told Nadella he could not make a long-term commitment to the company. (Good for him not to hang around twiddling his thumbs while looking for another job, as happens far too often at Microsoft and elsewhere.)

While Bates does not seem to have immediate plans that I could garner, he has had several CEO offers in recent months — IPO-bound GoPro among them — and is a well-regarded and well-liked exec in tech. He’s done big stints at a range of companies, including Cisco and Internet MCI. He came to Microsoft after it bought Skype, which he ran, in 2011. Bates is an active presence in Silicon Valley social and charitable circles, and had served as a member of the board of YouTube and LoveFilm.

A Microsoft spokesman declined to comment about the changes.

This article originally appeared on Recode.net.