Microsoft loses $450 million for closing all physical shops

Claudiu Andone
by Claudiu Andone
Windows & Software Expert
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Affiliate Disclosure

  • Microsoft closed its physical Microsoft Stores in March because of the pandemic, but now, the Redmond giant announced that this is going to be a permanent move.
  • The closing of Microsoft Store physical locations will result in a pre-tax charge of approximately $450M
  • We covered Microsoft's online and offline stores extensively. Visit our Microsoft Store category for more information.
  • If you're interested in more stories about the Redmond giant, check our Microsoft News Hub.
Microsoft closes all its physical shops and loses $450 million

Microsoft closed its physical Microsoft Stores in March because of the pandemic, but now, the Redmond giant announced that this is going to be a permanent move.

However, the strategic change it’s not without consequences for the company.

The closing of Microsoft Store physical locations will result in a pre-tax charge of approximately $450M, or $0.05 per share, to be recorded in the current quarter ending June 30, 2020.

The charge includes primarily asset write-offs and impairments.

Microsoft still keeps a couple of key locations open

Although the physical shops closing is imminent and permanent, Microsoft specified that they will reimagine the spaces that serve all customers.

Basically, the Microsoft Experience Centers in London, NYC, Sydney, and Redmond campus locations will not serve as retail points.

In the meantime, all the money that was spent on the physical stores is going to go to the digital storefronts on Microsoft.com.

In a LinkedIn post, Microsoft Store Vice President, David Porter, implied that there won’t be any layoffs:

Our team members will continue to serve consumer, small business, education, and enterprise customers, focused on sales, training and support.

They will work from Microsoft corporate offices and remotely. Our commitment to growing and developing careers from this diverse talent pool is stronger than ever.

Microsoft online market has grown during the pandemic

Microsoft’s decision was also influenced by a growing online market.

The company specified that Microsoft.com, and stores in Xbox and Windows, reached more than 1.2 billion people every month in 190 markets.