June 8, 1999 6:55 PM PDT

Another Microsoft exec leaving

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Microsoft's brain has been further drained with the departure of another key executive.

John Ludwig, a vice president leading Microsoft's MSN Access group, confirmed that he has taken an extended leave of absence. While Microsoft insists the leave is only to last three months, a source close to Ludwig said he does not plan to return.

Ludwig said he is keeping his options open.

In an email to CNET News.com, Ludwig said he would take the three-month leave to decide on his next step. "It may very well be something at Microsoft," he wrote. "It may be that I take three more months to think about it. Or who knows, my life could go in a whole different direction."

Ludwig last year took charge of various Internet properties as part of the interactive media group, including the Microsoft Network, Outlook Express, and the Internet Explorer start page. Microsoft this year underwent another reorganization, which put Ludwig under the newly created consumer and commerce group led by vice presidents Brad Chase and Jon DeVaan.

Ludwig's departure is one in a string of recent high-profile defections or extended leaves from Microsoft. Others include the year-long sabbatical of chief technology officer Nathan Myrhvold; the retirement of his brother Cameron; the extended leave of Brad Silverberg, who has returned only as a consultant; the resignation of Pete Higgins as head of the company's Interactive Media Group last year; the leave of Thomas Reardon, technical lead for MSN, due back next month; and the leave of J Allard, general manager of Microsoft's developer group, who is due back in September.

Peter Neupert, who was a leading force behind Microsoft's foray into new media, resigned in July 1998 and became chief executive of Drugstore.com, a venture backed by Kleiner Perkins Caufield & Byers.

"Microsoft is at a crossroads," said Jae Kim, analyst with Paul Kagen Associates. "They're heading in a lot of different directions and have had reshufflings of the hierarchy inside. It seems like there's some sort of spring cleaning inside Microsoft. There's a handful of very high-profile people, who for whatever euphemism they use to explain their departure, are distancing themselves from day-to-day operations."

One motivation behind the departures is the legendary performance of Microsoft's stock over the past decade. Executives and others have become millionaires many times over and have little financial incentive to remain in Microsoft's equally legendary hard-driving work environment.

Microsoft counters that at 7 percent, its attrition rate is below average. The senior-level attrition rate is even lower, according to Microsoft, at 5.4 percent. That number does not include employees such as Ludwig, Silverberg, and Nathan Myrhvold, who are considered on leave.

"Microsoft views their ability to retain people as one of their key assets," said company spokeswoman Heidi Rothauser. "When there are departures it opens up opportunities for strong performers to move up. It's not like there's this black hole."

Rothauser also said that Microsoft is being proactive in its attempt to retain employees. Those efforts include providing generous leave opportunities as well as promoting from within the company during reorganizations.

"Microsoft recognizes the need to have things in place to retain employees," she said.

News of Ludwig's departure was first reported by the Seattle Times.

 

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