Who still needs the office? Companies worldwide are starting to cut office space.

The corporate world is shrinking its real estate footprint as companies are letting more workers work from home, posing a growing threat to the owners of traditional office buildings and a sign that companies are looking for ways to cut costs due to the coronavirus pandemic.

A Reuters analysis based on quarterly earnings calls revealed that more than 25 global companies plan to reduce their office space in the coming year, catching up to cut the next largest spend after labor costs.

The intention of these players is to close 50% and more of their facilities, even if the staff doubles, these desks will only be allocated before adding additional space. This is based on the assumption that a significant portion of their workforce will continue to work from home even after there will be a vaccine for COVID-19. Logistics plans to slow the growth of their total square footage as more consumers shop online but total consumption declines.

Financial companies told analysts, “Whether it’s increasing use of facility services, working from home or changing schedules, we believe the total office square footage will continue to decline as some employees share desks or come to the office much less. .

The analysts say the plans to cut real estate is likely the first step in cost-cutting measures to cut employees as companies try to maintain margins in what could become a long recession.

Reductions in office expenses could likely be followed by layoffs and investment in technology, which should help improve productivity with a reduced workforce.

Morgan Stanley predicted in June that the “work-from-home” policy will increase vacancy in office building
s. Vacancy in Europe will be 10% -12%.

While companies tend to cut back on their real estate needs during typical recessions, the last four months of the economic lockdown have shown that many workers can stay productive at home, making these cuts more likely to become permanent.

Some consultants expect that demand for office space will be reduced by up to 15% as a result of home work, even after the corona pandemic has been contained.

Real estate development firm Accumulate Capital commissioned an independent survey of more than 500 key decision makers from companies across the UK and found that 73 percent of them expect to downsize as a result of this pandemic.

Nearly two-fifths (37 percent) said their company plans to move to a smaller commercial space in the next year. Now that there is less emphasis on employees who work from the office, people are looking for a new location with a cheaper rental price.

These developments have a major impact on your local server space. This requires a completely different strategy regarding data centers and server rooms.

Are you really going to rent / lease expensive office space to keep your existing server rooms? Colocation and cloud services are part of the solution!

The above challenges can be tackled for you by the co-location and cloud services of Datacenter United. At the moment there is already an increasing demand for colocation data center space, precisely because of the real estate problem. The external data center sector will therefore not be hit as hard by COVID-19 as internal data centers. In the long term, many companies will strengthen their colocation strategy to provide a more robust service in a world that increasingly depends on network connectivity and the availability of IT systems.

About Datacenter United

Datacenter United is a Belgian provider of high-quality data center services. Quality data center solutions are marketed under the label Datacenter United. With three data center locations in Belgium, two of which are located in the port of Antwerp and one in Zaventem, we are the ideal local partner for the outsourcing of your infrastructure. Each location is ISO, ISAE3402 (SAS70) and PCI DSS certified.

Visit our website for more information: www.datacenterunited.com. And discover how we can help your company and enjoy a nice start-up package!

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