Microsoft Stores are closed in China, employees are getting relocated

Microsoft has decided to shut down its physical stores in Mainland China. This move means that the company will now rely on partners and online sellers, including its own website, to sell its products. According to Global Times, Microsoft mentioned it would prioritize sales through these channels to serve the Chinese market effectively. Industry experts attribute the closures to a decline in interest in Surface products and insufficient profits from these stores.

Microsoft closes physical stores in China

Although Microsoft-branded physical stores are closing, their products will still be available through retail partners, Microsoft’s website, and various e-commerce platforms. Apple, whose successful physical retail strategy likely inspired Microsoft’s own, currently shows 47 stores in mainland China, along with additional locations in Hong Kong and Macau. Unlike Microsoft, Apple relies less on third-party retailers, focusing more on its own branded stores.

In addition to closing its retail stores in China, Microsoft has been relocating some of its employees from the country since May. Reports from Chinese state media indicate that Microsoft has asked at least 100 employees in China to consider moving to other countries. This request comes amid increasing tensions between Beijing and Washington over technologies like artificial intelligence (AI) and clean energy.

Customers in China will opt for online Microsoft stores now (Image credit) Employees have been offered relocation opportunities

Microsoft employees, particularly those involved with cloud computing, have been offered relocation opportunities to countries such as the United States, Australia, and Ireland. A Microsoft spokesperson explained to CNN, “Providing internal opportunities is a regular part of managing our global business. As part of this process, we shared an optional internal transfer opportunity with a subset of employees.”

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Microsoft, which entered the Chinese market in 1992, has relied heavily on its Beijing-based research lab, Microsoft Research Lab Asia, to build influence over the years. The ongoing tech war between the U.S. and China has been escalating, with the Biden administration imposing restrictions on the types of semiconductors American companies can sell to China in October. Additionally, the United States has recently encouraged its allies in Europe and Asia to restrict sales of advanced chipmaking equipment to China.

Featured image credit: Matthew Manuel/Unsplash