Microsoft is folding its Mountain View, Calif.-based UltimateTV division and getting out of the business of designing and subsidizing set-top boxes.
Microsoft TV Director of Marketing Laura Norman says the move is designed to focus the company's resources on the Microsoft TV platform, Microsoft TV and Xbox development.
The changes will take place during the next three months, with 168 of 500 jobs expected to be eliminated. Those remaining will be split among Xbox and Microsoft TV efforts.
In addition, Jon DeVaan, who has led the TV division and been general manager of the Microsoft TV unit, is taking a sabbatical. Moshe Lichtman, who has been with Microsoft for 10 years in various capacities, will take over DeVaan's role.
Norman says Microsoft is not closing its UltimateTV business but rather increasing its commitment to Microsoft TV.
"Our group gets bigger with a bunch of excellent developers who are very experienced in iTV coming on board so we're now fully staffed," she says. "We remain committed to our DirecTV partnership and to our UltimateTV customers, and we will continue to offer the UltimateTV service for both new and existing customers."