Microsoft today announced a "strategic change" in its retail operations that will see the company closing down almost all of its physical retail stores around the world including the ones in the United States. The company plans to keep only four of its Microsoft Stores open for customers. This includes the Microsoft Store in Fifth Ave, New York City; Oxford Circus, London; Westfield Sydney, Sydney; and the one inside its Redmond campus.
All of Microsoft's retail employees will now move to serve customers, small businesses, education, and enterprise customers through Microsoft's corporate offices or remotely. A Microsoft spokesperson confirmed that all of the retail employees will be given an opportunity to stay with the company.
Microsoft had already moved most of its retail employees to remote work after it shut down its retail stores in April due to the COVID-19 pandemic. Since then, the retail team has helped in hosting over 14,000 online workshops and summer camps along with 3,000 virtual graduations.
Microsoft's Corporate Vice President David Porter commented:
“Our sales have grown online as our product portfolio has evolved to largely digital offerings, and our talented team has proven success serving customers beyond any physical location. We are grateful to our Microsoft Store customers and we look forward to continuing to serve them online and with our retail sales team at Microsoft corporate locations.”
Microsoft notes that its hardware and software sales have primarily switched online and with its digital storefronts, it is now reaching up to 1.2 billion customers monthly in over 190 markets worldwide. While not mentioned in the announcement, the move will also help Microsoft cut down on its expenses as most of its retail stores were primarily located inside malls. The company does note that the shutting down of the retail stores will lead to a pre-tax charge of approximately $450 million in the current quarter ending June 30 primarily due to asset write-offs and impairments.