Microsoft is dramatically shrinking its in-person retail business and will close all but four of its brick-and-mortar locations, redirecting consumers in search of an Xbox or service to its online store.
“Our team has proven success serving customers beyond any physical location,” said David Porter, Microsoft Store vice president, in Friday’s announcement.
The tech giant will shutter more than 79 of its 83 stores worldwide, retaining only those in New York, London, Sydney and on its Redmond, Wash., campus. All store employees will be given the opportunity to move to other positions, including in customer service, training and support at corporate offices or through remote work.
The pandemic has taken a big toll on retailers of all stripes as stay-at-home orders forced nonessential businesses to suspend operations to adhere to social distancing protocols.
Much of that business continued online, Porter wrote, while stores have closed because of the pandemic.
“The evolution of our workforce ensured we could continue to serve customers of all sizes when they needed us most, working remotely over the last few months,” he wrote.
While stores have been closed, workers hosted more than 14,000 online workshops and summer camps, the company said, and 3,000 school graduation ceremonies.
He said the company would put more resources into its “digital storefronts” and use the retail workforce to offer new training and sales services, including one-on-one video sales support.
Microsoft shares stumbled on the news during Friday trading, falling more than 2 percent to trade for $195. But analysts were undeterred and remained bullish on the company’s outlook.
“We believe this move, coupled with Microsoft’s decision to abandon Mixer (e-gaming live-streaming platform) earlier this week, continues to demonstrate the company’s commitment towards not chasing good money after bad, and ultimately reallocating investments towards higher growth opportunities and away from those areas with perceived lower (return on investment),” Brad Reback of investment bank Stifel wrote in a Friday note. The bank gave Microsoft stock a “buy” rating at its Thursday closing price, $200.