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Several of the world’s largest technology companies are scrapping buildings that are part of European bases and headquarters in response to the declining economy.
In addition to the “big three” of Microsoft, Amazon and Meta, Google’s parent company Alphabet and Salesforce, the supplier of CRM software and collaboration software limp are all reportedly looking to move out of rented office space in London and Dublin.
The claims, reported by the Financial times (opens in new tab) and confirmed by insiders, are part of a series of cost-cutting efforts during the recession that has forced many companies to consider technology, software, staff and cybersecurity stacks to save money.
Hybrid work in a recession
These mass exodus are largely driven by the tech industry’s adoption of hybrid works policy, but there are still some holdouts.
As reported by the FTSnapchat owner Snap is looking into reopening and expanding its San Francisco office after closing in October 2022, and has told employees to return to the office four days a week.
Social media giant Twitter, led by Elon Musk, has urged employees to return to the officeand fell foul of local zoning officials after taking the step of installing beds in a commercial building (opens in new tab) in pursuit of the widely criticized “hardcore” work culture.
TikTok owner Bytedance also requires employees to commute two to three days a week and is about to strike a deal to become the sole occupier of Verdant, a new London building close to its headquarters in Farringdon, according to three insiders.
Google plans to vacate at least one of its London offices, in Victoria, when the lease expires next year, though it still expects to expand within Europe. The FT reported that the company plans to move most of its UK-based workforce into 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 opt for it work from home According to sources at the company, the company is permanently surveying most of the remaining leased property in England’s capital. Google declined to provide an official comment.
Meta signed a lease for a 310,000 square foot office in Fitzrovia in central London last year, but is now also reportedly seeking to sublet that building without ever moving in, having made similar efforts in the US for the property in Fremont, California.
It is also subletting a building in Austin, Texas, and has terminated leases on two of its three offices in Manhattan, New York.
Salesforce has plunged into 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, no one wins: either tech workers are being lured back to the physical office by their employers (despite there being no link between remote working and a drop in productivity). with the right tools), or entrepreneurs run the risk of those same companies becoming their landlords.