Microsoft Corp. (MSFT) is planning to close its Surface Hub manufacturing facility in Wilsonville, OR. The process, set to start in September, will see 124 jobs being slashed over the next few months.
Per ZDNet, Microsoft gained the ownership of the plant following its acquisition of Perceptive Pixel in 2012. It manufactured Microsoft’s huge touch-screen computers introduced in 2015.
The news comes just a week after Microsoft announced layoffs as part of its sales overhaul. Notably, a company-wide reorganization is underway for proper resource allocation. Reportedly, some of the workers will be offered jobs in other departments of the company.
It is anticipated that these steps will lower operating expenses, thereby aiding the bottom line going forward. We note that the company has outperformed the S&P 500 on a year-to-date basis. While the index gained 9.8%, the stock returned 13.9% over the same time period.
Will the Shutdown Aid Microsoft?
In mid-Dec 2016, per a Thurrot article, Microsoft officials had confirmed that Surface Hub would be shipped to over 2000 customers in 24 markets by the year end, within nine months of its launch.
In a recent report by Betanews, the product received a Windows 10 Creators Update and a five-year extended hardware service plan. So, the product, with an average selling price over $10,000, is in demand.
Microsoft Corporation Revenue (TTM)
Microsoft Corporation Revenue (TTM) | Microsoft Corporation Quote
We note that the closure of the plant and the subsequent retaining of the useful workforce will be a positive for the company, as it is planning to consolidate the Surface Hub manufacturing facilities. Microsoft is also planning to start the product’s development in Redmond.
It is anticipated that the cost streamlining processes will help Microsoft to better compete with peers like International Business Machines IBM, VMware VMW and Hewlett-Packard HPQ.
Currently, Microsoft holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains.
Click to see them right now >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
HP Inc. (HPQ) : Free Stock Analysis Report
International Business Machines Corporation (IBM) : Free Stock Analysis Report
Microsoft Corporation (MSFT) : Free Stock Analysis Report
Vmware, Inc. (VMW) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research