Microsoft exec Peggy Johnson joins AR start-up Magic Leap as CEO

Peggy Johnson, executive vice president of business development at Microsoft, speaks during the Wall Street Journal D.Live global technology conference in Laguna Beach, Calif., on Oct. 17, 2017.

Patrick T. Fallon | Bloomberg | Getty Images

Microsoft executive Peggy Johnson will join Magic Leap as CEO in August, the start-up announced Tuesday.

Johnson joins the augmented reality start-up after leading Microsoft’s M&A strategy and launching its venture fund as executive vice president of business development. She was hired by Microsoft CEO Satya Nadella in 2014 after a 24-year career at Qualcomm, where she worked in several roles, including running the internet services unit. At Microsoft, Johnson was a member of the company’s senior leadership team and navigated Microsoft through major partnership deals and acquisitions, including its $26.2 billion purchase of LinkedIn in 2016.

Magic Leap’s announcement comes weeks after founder Rony Abovitz announced in May he would step down as CEO, saying “it became clear to us that a change in my role was a natural next step.”

Founded in 2011, Magic Leap was the subject of extensive hype in its early days, and managed to raise about $3 billion from Alphabet’s Google and other investors. But the company’s first product, released in 2018 for over $2,000, showed lowered ambitions since the company’s early demonstrations and did not sell well. Magic Leap recently pivoted to focus on business scenarios. During the coronavirus pandemic, Magic Leap announced in April it would lay off staff as part of a structure overhaul. The New York Times reported that about 600 of its 1,900 workers were impacted.

Johnson told the Times she was driven to take the job because she wanted to be a chief executive. Her last day at Microsoft will be Tuesday, the company said in a filing.

Microsoft will look at internal and external candidates to replace Johnson, a Microsoft spokesperson told CNBC, and in the meantime, finance chief Amy Hood will take on her direct reports.

In an email to Microsoft executives Tuesday morning, Nadella wrote, “I want to thank Peggy for her leadership and partnership these past six years. Her ability to connect people, drive consensus, and forge relationships has taught me a lot. Through the years, she has been a clear role model for women at Microsoft and in technology, and I know she’ll continue to inspire young women in STEM in her new role.”

-CNBC’s Jordan Novet contributed to this report.

WATCH: After almost a decade and billions in outside investment, Magic Leap’s first product is finally available — here’s what it’s like

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