Acciording to a new report, Microsoft influenced Panos Panay's decision to leave the company after over two decades. Wikimedia Commons

A new report has shed some light on Panos Panay's decision to leave Microsoft. Panay, who led the Surface and Windows division for over two decades, announced his departure via an X (formerly Twitter) post last week.

Microsoft has been sparing no effort to be at the forefront of the AI segment lately. Still, there have been some massive Microsoft layoffs.

For instance, Sky News reported that Microsoft is set to lay off 11,000 employees on January 18th. On top of that, the company announced that it is reducing its device portfolio.

The impact of Microsoft's decision to reduce its device portfolio

In other words, the company will discontinue its Microsoft-branded webcams, mice, keyboards and other accessories. Reportedly, Microsoft was prepping to replace these accessories with premium Surface devices.

However, the American tech behemoth's decision to reduce its device portfolio directly affected the Surface hardware lineup. Now, the folks at Business Insider claim that some of Microsoft's more niche or experimental Surface hardware, including the Surface Headphones, have been scrapped.

In fact, a second-generation pair of Headphones that were slated to ship this year won't be released. Sources recently told Windows Central's Senior Editor Zac Bowden that Microsoft isn't ready to ship its other experimental Surface hardware, including the Surface Studio all-in-one and Surface Duo anytime soon.

Microsoft was reportedly gearing up to ship a Surface Laptop SE 2 this spring, but decided to cancel the product at the last minute. Likewise, the company scrapped an 11-inch Surface Pro in favour of the Intel N200 chip-powered Surface Go 4.

Currently, the Surface team only focuses on its most popular and high-profile hardware lines, including the Surface Go, Surface Hub, Surface Laptop Studio, Surface Laptop Go, Surface Laptop and Surface Pro.

Panos Panay's exit from Microsoft

Panay's surprising exit can be attributed to Microsoft's inability to manufacture new niche or experimental Surface hardware, Panay had a reputation for pushing unique hardware ideas, but much to his chagrin, it looks like Microsoft is only interested in the product designs that make more money.

In fact, it is still unclear whether Microsoft will start creating more experimental form factors in the future. Some reports claim the company is working on a foldable phone and tablet, a Surface monitor and a mini desktop.

It will be interesting to see whether these devices will see the light of the day. Nevertheless, these experimental devices aren't Microsoft's priority at the moment. In fact, Microsoft is focusing on unveiling a refreshed Surface Laptop Studio 2, Surface Laptop Go 3, and Surface Go 4 during its special event in New York.

The company is also leaving no stone unturned in a bid to integrate AI into its existing operating system, Windows 11. In line with this, Microsoft recently added Google Lens-like OCR to the camera and Snipping Tool.