As Microsoft struggles to move into interactive television, the software giant is to close the unit that manufactures set-top boxes for its UltimateTV digital video recorder.

Around 252 of the unit’s 420-strong workforce will be moved elsewhere in Microsoft; the rest may be made redundant. In addition, the executive in charge of TV operations, senior vp Jon DeVaan, is being replaced by Moshe Lichtman.

UltimateTV – thought to have only around 100,000 paying customers – will still be produced, said Microsoft, but is being folded into a new division responsible for all the group’s television activities.

The closure of the UltimateTV unit has been on the cards since NewsCorp lost the race to buy satellite broadcaster DirecTV. Microsoft backed Rupert Murdoch’s offer, hoping that, if the bid succeeded, the resulting company would use its technology.

News source: Wall Street Journal