BEERG Newsletter - Future Work: Multinationals to cut office space

The Financial Times reports that the property consultants, Knight Frank, predicts that half of big multinationals plan to cut office space in next three years as they adapt to the rise of WFH since the Covid pandemic. 

A survey of executives in charge of real estate at 350 companies round the world that together employ 10mn people found that, among major groups cutting their footprint, the largest number was aiming to reduce space by 10% to 20%. Nearly half of the companies surveyed are also planning to change their headquarters in the next three years. 

Companies are taking different approaches to working from home. BlackRock, the investment manager, last month ordered all employees back to the office four days a week, following JPMorgan’s decision in April to ask senior staff to work in person full time. Roughly a third of companies have opted for fully or mostly in-person work, according to the Knight Frank research, which covered companies worldwide in industries ranging from tech to financial services. The majority, or 56%, of companies have settled on a hybrid policy, while about 10% plan to be mostly or entirely remote. Following a round of lay-offs, ride-sharing group Lyft in April reversed a policy to allow fully remote working and told employees to come back to the office part-time later this year. 

Meanwhile, Ronni Zehavi, chief executive of human resources tech firm HiBob, says hybrid working “will stay with us for ever,” and warns that companies demanding their workers spend five days in the office “will experience a very high level of attrition." While a number of firms are urging staff to return to their desks, and UK finance minister Jeremy Hunt has suggested that the "default" location for workers should be the office, Mr Zehavi said hybrid working is “here to stay," adding: "It's irreversible. It's not short-term hype; it's a change that will last for the next ten to fifteen years." 

He added that around 90% of HiBob's clients were committed to hybrid working and were "finding it very productive." On a shift in working patterns, he added: “It's no longer about counting hours, it's about productivity.” He also expects the five-day working week to become a thing of the past.