Microsoft made a decision to close all 83 retail stores worldwide permanently. The thousands of workers from the outlets have already transitioned to the digital effort and will continue in those roles, the company said.
Only four stores will open but no longer sell products.
Online sales have increased, so the company has changed its focus.
The statement issued by Microsoft yesterday shocked the entire technology industry.
This seems less like a strategic change and more like "quitting the retail business". Microsoft is not firing its retail employees, instead they will serve customers from Microsoft corporate facilities and remotely providing sales, training, and support.
According to its website, Microsoft has 83 physical stores showcasing and selling laptops, electronic gadgets, accessories, and other hardware worldwide.
Despite the bold shift from physical to online-only retail, Microsoft will not be laying off any store associates, the company has confirmed to The Verge.
This does explain why Microsoft had yet to reopen a single store after all of them closed due to the pandemic.
Microsoft expects to record a charge of $450 million, or $0.5 a share, during the current fiscal fourth quarter, for asset write-offs and impairments.
There are approximately 72 stores in the United States, and several others overseas showcasing and selling laptops and other hardware.
"We have seen strong growth on Microsoft.com and our digital Xbox and Windows storefronts, reaching up to 1.2 billion monthly customers in 190 markets", he said.
The four locations that will become Microsoft Experience Centers are in London, New York, Sydney and at the company's Redmond, Washington headquarters. However, the bad news is what this transition is going to cost for Microsoft. The company has various device launches, including the Xbox Series X and Surface Duo, slated for later this year.
As if to salt the open wound of the stores' absence, Microsoft's stock price barely moved after news of closures was publicized. "New services include 1:1 video chat support, online tutorial videos, and virtual workshops with more digital solutions to come".
Because of this, the company will reimagine its offerings at certain flagship stores, transforming them into Experience Centers that will provide education and interactive product placements.