Microsoft on Friday announced a strategic change in its retail operations, including the closing of Microsoft Store physical locations.
The Redmond giant will now focus on selling its products on digital retail moving forward. However, the company’s retail team members will continue to serve customers from Microsoft corporate facilities and remotely providing sales, training, and support.
While Microsoft is pulling the plug on nearly all of its retail stores, the four Microsoft Store locations that will remain open are New York, London, Sydney, and Redmond campus locations, transforming these last stores standing into what it’s calling “Experience Centers”.
The move to close Microsoft Store physical locations will result in a pre-tax charge of approximately $450 million, which the company says it will record in the current quarter ending June 30, 2020. The charge includes primarily asset write-offs and impairments.
“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,” said David Porter, Corporate Vice President for Microsoft Store.
The closing of Microsoft Store locations in late March due to the COVID-19 pandemic has shown the company that the retail team has helped small businesses and education customers digitally transform; virtually trained hundreds of thousands of enterprise and education customers on remote work and learning software; and helped customers with support calls. The team supported communities by hosting more than 14,000 online workshops and summer camps and more than 3,000 virtual graduations.
“We deliberately built teams with unique backgrounds and skills that could serve customers from anywhere. The evolution of our workforce ensured we could continue to serve customers of all sizes when they needed us most, working remotely these last months. Speaking over 120 languages, their diversity reflects the many communities we serve. Our commitment to growing and developing careers from this talent pool is stronger than ever,” said Porter.
The retail team members will serve consumers, small-business, education, and enterprise customers while building a pipeline of talent with transferable skills.
“The Microsoft Store team has long been celebrated at Microsoft and embodies our culture. The team has a proven track record of attracting, motivating, and developing diverse talent. This infusion of talent is invaluable for Microsoft and creates opportunities for thousands of people,” said Kathleen Hogan, Chief People Officer at Microsoft.
With significant growth through its digital storefronts, including Microsoft.com, and stores on Xbox and Windows, the company will continue to invest in digital innovation across software and hardware, reaching more than 1.2 billion people every month in 190 markets.
New services include 1:1 video chat support, online tutorial videos, and virtual workshops with more digital solutions to come.
“It is a new day for how Microsoft Store team members will serve all customers. We are energized about the opportunity to innovate in how we engage with all customers, maximize our talent for greatest impact, and most importantly help our valued customers achieve more,” said Porter.