Stephen Elop may not be Microsoft's new CEO, but the former head of Nokia is not going unrewarded for bringing the phone manufacturer into the Microsoft fold. According to an internal memo, Elop will replace Julie Larson-Green as the head of Microsoft's Devices and Studios business, putting him in charge of Xbox, Microsoft Surface, and Microsoft's game development efforts, in addition to the new cellular handset business. A Microsoft rep tells us that Elop had been slated to take over Devices and Studios ever since the Nokia acquisition, but originally Larson-Green would have stayed with the team as a subordinate.

Instead, Larson-Green is taking on a new role: she's becoming the Chief Experience Officer for the company's Applications and Services group, managing the look and feel of products like Bing, Office, and Skype.

Larson-Green will report to ASG head Qi Lu

It's hard not to see the move as a demotion for Larson-Green, who rapidly became the woman in charge of Windows after Steven Sinofsky left the company, but who was quickly shifted to Devices and Studios after Terry Myerson stepped up. Now, she's being shifted back to more familiar territory: she spent years working on UI design for Internet Explorer, Microsoft Office and eventually Windows itself before her rise to upper management. However, that doesn't mean her new role might not be just as important to the company. It was user experience that determined the consumer reaction to Windows 8, and it might be user experience that determines whether Microsoft's services catch on. Under new Microsoft CEO Satya Nadella, who was previously in charge of Microsoft's services push, Larson-Green may be literally shaping the look and feel of the company's future.

You can read Larson-Green's full memo below.

Team,

As you will read in the notes below from Qi and Satya, I've accepted a new challenge, leading the My Life & Work team in ASG and serving as the Chief Experience Officer (CXO). As hard as it is for me to leave Devices & Studios, I'm thrilled about this opportunity. In working with company leaders this year to establish our One Microsoft vision and plan, I thought about ways I could have impact on helping Microsoft prepare for the future and innovate. My discussions with Satya and Qi made clear this is a critical space to drive new thinking and an essential way to help the shape the company's direction. I'm looking forward to developing the Digital Life & Digital Work Experience Substrate that powers modern digital experiences regardless of device, as well as working across ASG to strengthen customer experiences.

I want to thank each and every one of you for welcoming me and supporting me as the leader of Devices & Studios over the past 7 months. I'm very proud of what we have accomplished during such a short timeframe. We launched Xbox One, Surface 2 & Pro 2, blockbuster games like Forza and Ryse, a brand new Xbox Music and Video service, PPI, and some amazing unannounced innovations just to name a few - incredibly impressive!

Our opportunity to grow as a world-class devices and experiences company is greater than ever, and I have every belief that as One Microsoft we're on the right path. The addition of Nokia Devices & Services into the DnS family will add tremendous scale, talent and opportunity for our future.

I'll remain in role leading the DnS organization in the interim until the Nokia deal closes and Stephen Elop makes his transition to Microsoft. We've been meeting regularly throughout and are making a lot of progress, ensuring our teams are ready for the Day 1 close and beyond.

You are all in great hands with Stephen and already we've shared a lot with him and his LT from Nokia regarding all of the fantastic people, teams and products in DnS. I also know many of you are looking forward to welcoming the Nokia team and working more closely with them.

As I look to the future, I'm reminded of a favorite Chinese proverb: "To get through the hardest journey we need take only one step at a time, but we must keep on stepping."

I encourage you all to stay focused on the journey and opportunities ahead, and know that I'll be there in step with you as we launch the next chapter of Microsoft.

Thank you,

Julie

Correction: this article originally stated that Stephen Elop was slated to lead a separate expanded devices team while Julie Larson-Green would have run the current Devices and Studios team, once Elop rejoined the company. A Microsoft rep informed us that those two teams are actually one and the same, and Elop would have been head of Devices and Studios all along.