Microsoft said that closing its retail stores will result in a pre-tax charge of approximately $450 million or $0.05 per share. This includes asset write-offs and impairments.
"Speaking over 120 languages, their diversity reflects the many communities we serve", Microsoft Corporate Vice President David Porter said of the company's retail employees in a statement.
"We deliberately built teams with unique backgrounds and skills that could serve customers from anywhere", Porter said.
Besides product sales, Microsoft's stores offered users a place to try out Windows-run PCs, Xbox consoles and various third-party computers and phones.
The Redmond-based tech giant announced that it is permanently shutting down 79 of its 83 retail stores and turning the remaining four retail stores-London (Oxford Circus), New York City (Fifth Ave), Redmond (Campus Location), and Sydney (Westfield Sydney)-into experience centers where people can't buy products. They will showcase new technologies but will not sell anything.
The move follows Microsoft being forced to close its stores in March this year due to the COVID-19 pandemic. Since then, the company said its retail team has hosted more than 14,000 online workshops and summer camps, training hundreds of thousands of enterprise and education customers on using remote work and learning software. The company has 271 USA retail locations though it has temporarily closed 32 of those stores since last week amid rising coronavirus case counts in several states.
The company will reportedly focus on digital retail, stating Microsoft.com and the Xbox and Windows storefronts reach "up to 1.2 billion monthly customers in 190 markets". Just last week the company announced it was shuttering its streaming platform Mixer in a merger with Facebook Gaming. "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".
"This is a tough but smart strategic decision for (Chief Executive) Nadella & Co.to make at this point". It had started opening more retail stores across the world over the past decade and tried to compete with Apple in retail space.