Several of the world’s largest technology firms are axing premises that are a part of European bases and headquarters in response to the declining economy.
Alongside the “big three” of Microsoft, Amazon and Meta, Google’s parent company Alphabet and Salesforce, the provider of CRM software and collaboration software Slack are all reported to be looking to move out of leased office space in London and Dublin.
The claims reported by the Financial Times (opens in new tab) and corroborated by insiders, come as part of a series of cost-cutting drives amidst the recession, which has forced many companies to consider streamlining their tech, software, personnel other cybersecurity stacks to save money.
Hybrid work in a recession
These mass exoduses are largely driven by the tech industry’s acceptance of hybrid working policy, but there are still some holdouts.
As reported by the FTSnapchat owner Snap is exploring reopening, and expanding its San Francisco office after closing it in October 2022, and has told employees to return to the office four days a week.
Social media giant Twitter, under Elon Musk, has pushed for employees to return to the officeand fallen foul of local zoning officials after taking the step of installing beds in a commercial building (opens in new tab) in pursuit of its widely-criticized “hardcore” work culture.
TikTok owner Bytedance is also mandating that employees commute two to three days a week, and, according to three insiders, is close to closing a deal to become the sole occupier of Verdant, a new building in London close to its Farringdon headquarters.
Google intends to abandon at least one of its London offices, in Victoria, when its lease ends next year, although it still expects to expand within Europe. the FT reported that the company intends to move most of its UK based staff to a new office under construction in King’s Cross that is expected to cost £1 billion.
However, in a bizarre move reportedly driven by 1 in 10 Google employees to choose to work from home permanently, the company is exploring subletting most of its remaining rented real estate in England’s capital according to sources at the company. Google declined to make an official comment.
Meta signed a lease on a 310,000-square-foot office in Fitzrovia in Central London last year, but is now reportedly also trying to sublet that building without ever having moved in, after starting similar efforts in the US for its Fremont, California premises.
It is also subletting a building in Austin, Texas, and has terminated leases for two of three offices in Manhattan, New York.
Salesforce has plunged for a similar tactic, with the FT reporting that it has publicly confirmed plans to sublet part of a floor in its London tower office.
As a result of these shifts, nobody wins: either tech workers are cajoled by their employers back into the physical office (despite there being no link between remote work and a dip in productivity with the right tools), or business owners run the risk of having those same corporations become their landlords.