Financial Times: Coronavirus changed offices for good

Coronavirus changed offices for good. Key global companies are going to leave many employees to work remotely after the pandemic, as well as get rid of excess office space, writes the Financial Times.

According to a PwC survey conducted in late April, 2020, 26% of CFOs of the largest US companies plan to cut costs related to real estate. And 49% of companies are going to make remote work permanent for positions that allow this.

“The very idea of ​​putting 7,000 people in an office building could be a thing of the past,” said Jess Staley, CEO of Barclays, a UK investment bank.

“In six weeks, we moved almost all of the back-offices in America to kitchens and living rooms, and everything went pretty smoothly,” says Tom Stringer of the BDO audit company. People get used to the new conditions, and no one else is surprised by the child or dog that appeared during the video conference, he adds.

Experts note that, at least in the short term, social distance will reverse the trend of “densification” of commercial real estate, when more and more people crowded into smaller spaces.

Another trend may be shift work, including also the seven-day work week. Offices will be only half occupied to ensure sufficient distance between colleagues.

If company employees work in shifts, alternating between office and remote work, then there is no need for large offices, says Michael Silver, chairman of the real estate company Vestian.

According to his forecast, this could reduce the cost of commercial real estate by 30%. “Landlords will review agreements, and rents will decrease as we have not seen since the early 90s,” he adds.

“We probably don’t need all the offices that we now have around the world,” said Dirk van de Put, Executive Director of Mondelez, a multinational food company.

The head of the Swiss bank UBS Sergio Ermotti admits that he was already considering the possibility of moving the company from expensive offices in the city center.

Source: https://www.ft.com/content/1b304300-0756-4774-9263-c97958e0054d