Tech giants get rid of office space
The turn of the decade in 2020/2021 saw a new era of remote working. It became more apparent with the COVID-19 pandemic saga with mandated limited human contact policies in many countries. Now that COVID-19 is leaving and things are returning back to normal, things in the business world are not exactly returning to normal.
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One major show of this is the fact that the tech giants are closing up offices in various countries of the world and Europe is not left out. In fact, there have been rumours and talks of Meta and Alphabet closing up many of their major offices around the globe.
Now, what does this mean for employees and small tech startups? Keep reading this article to get the gist and also get yourself ready for the change that is sweeping the tech industry now.
Why are giant tech groups closing up shops in Europe?
One thing the technology industry is known for is being dynamic; they move with time. They set the pace for industrial revolutions and evolutions. Many other industries tend to play catch up.
It is a known fact that many tech industries such as Meta (parent company for Facebook), Alphabet (Google’s parent company), Amazon, TikTok, etc. are closing up some of their offices around London in Europe, San Francisco in the USA, and other major cities of the world where they were originally established and doing well.
However, before you start panicking about what that could mean for your present job or the prospect of getting one, here are why these tech giants are giving up their office space leases or subletting their real estate properties instead of occupying them themselves.
- Cutting costs and increasing profits. The major reason for setting up a company that is not a charity is to make a profit. Now, in recent times, stock prices are dropping drastically and these tech giants are bleeding money badly. Many of them had earlier resorted to laying off staff. For example, according to Investors Business Daily, the Nasdaq tech stocks dropped about 33% in the last year which is a record low since the financial crisis of 2008. There is a projection of this being a trend for a while in 2023 and these tech companies, therefore, need to downsize on expenses.
As such, the best thing is to close up office spaces in areas where many of their employees are working remotely anyway. Indeed, many of these technology companies were on the verge of expanding into new territories before the pandemic broke out. Now, they are either subleasing their current spaces or completely putting their real estate properties up for sale in their entirety. All in all, these companies are just trying to manage their expenses to cushion the effect of the drop in the prices of the IPO market stocks. You would too if you were in their shoes.
- Encouraging remote and hybrid workers. As pointed out earlier, the pandemic of 2020 brought with it the need for people to work remotely. Now, working remotely is a thing and most people are not ready to commute every day simply to do a job they could do from the comfort of their homes. Seeing that, giant technology companies, including startups, are making the option for remote working available to old and new employees. Some may choose to be completely remote, especially when they live far away from the company’s official space or be hybrid workers who only come to work for 2 or 3 days a week.
It is thus not a wonder when these companies have to reduce their office space. If there will not be people to occupy those spaces, it is a big waste of money and resources. Some of these companies are even making hybrid and fully onsite workers cram into cubicles to further reduce overhead costs. So, if you do not have to be at work to do your duty and you are not comfortable with cubicle sharing anymore, you should consider going fully remote.
Also, many people have become so disenchanted with the general supposition that you have to be onsite to perform your job. This has led to more people searching solely for remote or hybrid jobs such that the tech giants do not have a choice but to seek ways to make sure they do not lose their current position as giants. Some workers are jumping ship to other companies while others still are resigning to start their own freelancing thing.
- Joining the green movement. Although subtle, and probably not fully intended, the switch to remote working is inadvertently reducing the carbon released into the atmosphere every day when people do not have to commute by cars, buses, or trains. As such, the reduction of air pollution in urban areas is making green revolution activists encourage and insist on remote working more. Many companies are trying it out and seeing that it is working for their brands and are thus adopting the strategy in a bid to be socially acceptable. No company wants to be the reason why the earth is falling apart at the seams.
- Encouraging technology companies to work with the best from all over the world. Since the option of remote working is now on the table and not an anomaly, these big tech companies can hire part of their staff from other countries without having to think about the expenses of relocating them. What that implies is that the CEO that should be occupying the big corner office space may not be there. All he has to do is teleconference through Zoom, Google Meets, Loom or other teleconferencing apps. In other words, the number of office spaces that was necessary to keep a business conglomerate at the top of the tier before the pandemic is no longer needed. Hence, the downsizing.
- Unwillingness to let more workers go. Many of these tech giants have had to let about 20% or more of their workers go in the past year. So, if they have to keep the office space, it would be at the expense of letting some valuable employers go. That is because they will need to keep spending money on overhead, whereas the employees may suffer when they do not get their salaries or even get a cut. So, to keep the employees happy or even give raises when due, it is necessary to keep the real estate properties they have to manage to the barest minimum.
What does the cut in office space mean for employees?
Mostly, what it means is that you can opt to work fully remotely instead of hybrid or fully onsite. This option of remote working is becoming a juicy highlight of most job vacancy posts. This way, you can have more time to spend with your family rather than being on the road for most of the day.
Working remotely also improves mental and physical health when you do not have to constantly worry about proving some point to co-workers or higher-ups.
Another important thing is that you are more likely to get paid more. With remote working comes the realisation that some skills are very valuable. Therefore, it is possible to get a raise easier than you did when you were working as a fully onsite staff. Conversely, you could simply seek employment elsewhere if your current employer is unwilling to budge and increase your pay. There are a lot of startups looking for experienced workers to join their teams with a lot of attractive packages and high salary offers.
You can also choose to do other jobs on the side without hurting your primary job which ultimately makes you earn more than you are presently earning.
How your tech startup can benefit from this turn of events?
- Make use of virtual offices – you can choose not to own physical office space and opt to work with virtual office providers instead. That way, you can easily get some seasoned employees who are ready to jump ship to work with your startup company. Virtual offices are actual offices because it is a real estate property but it works more like a delivery point where all necessary office needs are provided for your business. The only exception is that you are not physically present there. Even if you would need an office space for occasional meetings, you only need to lease a room ahead of time to make it available for your use. Virtual offices come with added benefits in various packages depending on the provider you choose.
- Strategize ways that can take most of your workflow online – making most of your tech jobs completely remote is a good way to attract some employees. It would interest you to know that many people do not appreciate being closely monitored when carrying out their duties. Now that there is the option of working remotely, these people will always go for that option. You, therefore, need to strategize which jobs can go completely remote, which needs to be hybrid and which needs to be fully on the ground.
- Give remote working options to employees – if you have already begun business, you can give your current employees the option to work a few days away from the office. This keeps them happy and prevents the event that they will want to seek better options elsewhere.
- Reduce overheads and manage expenses – cutting your expenses will only increase your overall profits. If the giants are doing it, why not you? Do not let the mentality that you need to be established first before you implement some strategy stop you from moving with current trends. You may not know this, but some startups are fully remote, including the CEO. They only need to get a virtual office address for company registration and they can begin operation.
While some companies are becoming accidental landlords, the established landlords are looking at a year when more people are buying than selling in the real estate industry. You could take advantage of this now to get prestigious office spaces at low prices.
In another world, you could just leave the real estate industry as is and go with the trend of taking your company remote too. All in all, this is a time when changes need to be made to keep up with how things are changing and small businesses are not left out.
Who are the big five tech companies?
This company is currently grossing about $2.5 trillion in the stock market. It is the company that manufactures all apple products including iPhones, iWatches, Macbooks, iTunes, etc, including their operating systems.
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