Microsoft Corp. (NASDAQ: MSFT) CEO Steve Ballmer sent an internal email to employees early Thursday morning about a major realignment of the Redmond, Wash.-based company. Microsoft, he said, is aiming to consolidate into a single “One Microsoft” strategy, rather than be spread out among a collection of divisional strategies.

Ballmer said Microsoft will focus much more on the “devices and services” chapter that it started last year. This is the team responsible for Windows 8, Surface and a consistent user interface across PCs, smartphones, tablets and Xbox. Ballmer’s message said the devices and services chapter will also focus on cloud services, data center operations, manufacturing and supply chains.

“To advance our strategy and execute more quickly, more efficiently, and with greater excellence we need to transform how we organize, how we plan and how we work,” Ballmer said.

The company is reorganizing by function. The biggest change comes to engineering, which Ballmer said was spread too thin among departments. These will be consolidated into four core groups: OS, pps, Cloud and Devices.

“Our engineering culture and new structure will enable more cross-group contribution, while maintaining confidentiality of some projects as needed,” Ballmer said.

Terry Myerson will head the OS group, which spans PCs, mobile devices and Xbox. Julie Larson-Green was named head of the devices and studios engineering group. This includes hardware development, supply chains and the entertainment studios that produce music, games and video. Qi Lu will be in charge of apps engineering and Satya Nadella will be in charge of cloud and enterprise technologies like IT and development tools.

Dynamics, which Ballmer said “represents significant opportunity,” will remain independent from other departments to receive special focus. This department focuses on business technologies, and Kirill Tatarinov will continue to be in charge.

Eric Rudder will replace Rick Rashid in the research department, and Tami Reller will take charge of Microsoft marketing. Mark Penn, the man behind the anti-Google campaign, will join Reller in developing marketing strategy.

Kevin Turner will continue his role as COO. The former head of Skype, Tony Bates, will take over the business development team and focus on partnerships Microsoft has with companies like Yahoo and Nokia.

To round up Microsoft’s new executive team: Amy Hood will lead finance, Brad Smith will be charge of the legal team, and Lisa Brummel will head up the HR group.

Kurt DelBene, who worked for Microsoft for more than 20 years and helped bring Office to the cloud, is retiring from Microsoft. Ballmer also said that Craig Mundie will be leaving his current position to devote his time to a “special project.”

Ballmer’s email said the new structure will help the company be nimble, communicative, collaborative, decisive and motivated.

“In other words, better execution and innovation through strategy and goal and discipline and engineering coherence,” Ballmer said. “One Microsoft all the time.”

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