Panos Panay left Microsoft due to big cutbacks on more ‘experimental’ Surface devices

What you need to know

• Earlier this year, Microsoft announced that it was reducing its devices portfolio amidst layoffs and cutbacks.
• Now, a new report details the kind of hardware Microsoft has cut from the lineup.
• Unsurprisingly, these cutbacks are a primary reason for Panos Panay’s abrupt departure. 

2023 has been a big year for Microsoft. There’s been some serious investment and growth in AI while also cutting back and laying off thousands of people. It began earlier this year with the announcement that 10,000 employees were being let go.

Around the same time, Microsoft announced that it was reducing its device portfolio and mentioned that it would be scrapping the “Microsoft” branded accessories in favor of premium Surface ones. But that wasn’t the whole story. The move to reduce its device portfolio has also directly affected the Surface hardware lineup.

A new report from Business Insider details that much of Microsoft’s more niche or experimental Surface hardware, such as the Surface Headphones, has been scrapped. A second-generation pair of Headphones were due to ship this year, but now won’t be. 

My own sources say that other experimental Surface hardware, such as the Surface Studio all-in-one and Surface Duo, have also been placed on the back burner, with no plans to ship a new version of either product line for the foreseeable future. 

Microsoft had planned to ship a Surface Laptop SE 2 this spring but canceled the product at the last minute. An 11-inch Surface Pro was also being considered at one point but has now been scrapped in favor of the Surface Go 4 with an Intel N200 chip.

The plan, for now, is for the Surface team to focus only on its most popular and high-profile hardware lines, the Surface Pro, Surface Laptop, Surface Laptop Go, Surface Laptop Studio, Surface Hub, and Surface Go.

Unsurprisingly, being unable to ship new niche or experimental Surface hardware is a crucial reason why Panos Panay left so abruptly. Panay has consistently pushed for more unique hardware ideas, but it sounds like Microsoft is only interested in the product designs that make the most money.

It’s possible that in the future, Microsoft will return to shipping more experimental form factors. I know the company was working on a foldable phone and tablet, as well as a Surface monitor and mini desktop. Maybe these devices will still ship in the end, but these experimental devices are not Microsoft’s priority for now. 

In the immediate future, Microsoft will unveil a refreshed Surface Laptop Studio 2, Surface Laptop Go 3, and Surface Go 4 during its special event in New York City today.

Zac Bowden is a Senior Editor at Windows Central. Bringing you exclusive coverage into the world of Windows on PCs, tablets, phones, and more. Also an avid collector of rare Microsoft prototype devices! Keep in touch on Twitter and Threads