As the world of computing was taking shape, Microsoft emerged as one of its founding fathers. The company’s OS became the go to service for all computing devices, and to this date, rules the industry. But then Microsoft forayed into hardware, trying its hand at both smartphones and computers. As history has it, none of those beta have yielded expected results for the company. Thus, MS has announced closing down of all its physical retail stores, and for good.
Microsoft says that the income from its retail stores simply paled in comparison to the online market. Thus, from a financial standpoint, the stores served no real purpose. Moreover, COVID 19 and subsequent lockdowns fueled this shift in culture, almost decimating any offline presence that still existed.
“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,” Corporate VP David Porter says in the blog post titled, “Microsoft Store announces new approach to retail.
Now, the company will take a related pretax asset impairment charge of $450 million in the current quarter. Even though the decision is causing Microsoft a little amount of pain (when you are Microsoft, $450 million is ‘little’), in the long run, this surely is in the best interest of the company.
The company will still maintain some street presence. For example, its corporate facilities will still be very much intact, with team members working remotely from these locations. Moreover, the term “all Microsoft retail stores”, doesn’t include London, New York City, Sydney and its own campus in Redmond, Washington, which really negates the “all” of it, but it is what it is. However, these locations will be turned into “Microsoft Experience Centres”, which will essentially act as locations where you can “experience” everything Microsoft, without any actual purchasing.
All that being said and done, what about the employees working in these stores? The world is already suffering from a job crisis, with the unemployment rate in the U.S. reaching an all time high. A Microsoft spokesperson addressed this issue by assuring that all current employees will be given the chance to stay with the company in different roles, a responsible decision on the company’s behalf and much appreciated.
David Porter added, “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.”