Microsoft closes its physical stores globally as part of online push
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  • The Coronavirus pandemic has made businesses realize the power of digital and therefore Microsoft has announced closure of all its stores permanently.
  • This move is part of its strategy to boost its digital infrastructure.
  • No layoffs will be seen, as the workforce will be upskilled with transferable skills and continue to work remotely.

The ongoing global pandemic has affected businesses and global economies with revenues sinking to levels as low as the recession. With most companies going digital, the drive to boost online offerings such as contactless payments and e-commerce has changed customer behaviour entirely.

One of the main segments impacted by the Coronavirus-induced lockdown which limited most of the population to stay indoors is brick and mortar stores. High-street and high-end brands witnessed the burn of the lack of sales having to shut shop.

The tech sector is no different. Lately, Microsoft announced that it shut all its physical stores taking its business model online. The tech giant which has more than 70 stores in the US will now invest its resources to bolster its digital infrastructure.

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Commenting on this announcement, VP at Microsoft Corporate David Porter said: “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.”

Porter said in a LinkedIn post Friday that the company would also “reimagine new spaces that serve our customers, including our Microsoft facilities in London, New York City, Sydney and Redmond campus locations.”

While the company promised customer satisfaction, it also ensured the wellbeing of its employees.

Given that the company was in the non-essential category, it had to shut its stores in March during the lockdown period. However, the staff continued to work remotely by aiding in customer support calls. During this time, the company even hosted a slew of workshops to help its workforce upskill in various subjects.

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While one would deduce shutting shops would affect thousands of jobs, the company said the retail staff will continue to work while “building a pipeline of talent with transferable skills.”

“We deliberately built teams with unique backgrounds and skills that could serve customers from anywhere,” said Porter. “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.”

An exception to these store closures will be the Microsoft Experience Centers in New York, Redmond, London and Sydney.

The closing of Microsoft physical locations will result in a pre-tax charge of $450m for the current quarter ending June 30 and such amount “is mainly due to depreciation and impairment of assets,” the firm said in the statement.

The question lies whether will Microsoft’s decision encourage other tech companies to leverage online and shut physical shops entirely.