In the latest twist to Microsoft’s Zune saga—and its quest to decouple the Zune “platform” from the device itself—Microsoft is reorganizing the Zune team along the hardware and software lines. The bulk of the staff remain with the software and services unit, which will now be overseen by Enrique Rodriguez, VP of Microsoft’s TV division; the hardware development team will now report to Tom Gibbons, who heads up hardware design for Windows Mobile.

SEE ALSO: Microsoft’s Zune: $100 Million Sales Drop Plus Layoffs Equals Questions

According to CNET, the restructuring came amid Microsoft’s unprecedented round of layoffs last month, which reportedly cut deep into the struggling Zune division. Rodriguez told CNET that the change was less about Zune’s poor sales and more about aligning the teams with Microsoft’s goal of expanding the device’s platform—including making Zune’s service available on other players and creating original content with a new production unit. Rodriguez added that the focus on software wasn’t coming at the expense of hardware development, as new players would be launching this fall.

In the wake of news that Zune division sales had dropped 54 percent—or by $100 million—in Q4, Zune spokesman Adam Sohn told paidContent that Microsoft (NSDQ: MSFT) was committed to the Zune business “for the long term.” This latest reorg—and the company’s plans to open its own retail stores—make it even clearer that Microsoft plans to stay the course.

Photo Credit: Peter Boden