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Why companies should cut office space, not people

Why companies should cut office space, not people

Aug 25, 2022

6 mins read

Workspace Spend Management

Editor update: Why should companies consider on-demand office space? Since we first posted this article, a lot has changed, as many companies including Meta, Salesforce, Stripe, Chime, Zillow, and Twitter have started layoffs. Based on what we’re seeing, more are sure to follow. It’s now more critical than ever to reevaluate whether office space is truly necessary. In an upcoming analysis that we’re currently conducting, we’ve found that in New York, where commercial office space averages about $80 per square foot, for example, a company can retain one software engineer by eliminating 1,450 square feet of office space. That’s equivalent to shifting about eight employees to remote work.


When times get tough—and right now, they are tough—you know what happens: companies start cutting costs. Fancy snacks, after-work events, and unfortunately, people. As you might have experienced yourself, layoffs have been the main lever companies used to significantly and expeditiously reduce expenses. And that just makes tough times even tougher for everyone. 

But as it turns out, office space is high on the list of expenses for non-remote companies. And with a clearer path than ever for companies to shift some or even all of their employees to remote work, cutting office space and moving to on-demand office space is a smart way to decrease costs and eliminate reputation and cultural issues that layoffs can have on your company’s reputation. Best of all, it keeps the lifeline of your company—your employees—intact. 

Making the leap from hybrid work to remote work

The key workplace policy change that needs to happen to shed office space is moving from hybrid work to fully remote work. But let’s be clear, “remote” does not mean “no office at all.” But shifting away from hybrid work does mean you can eliminate the cost of a fixed office lease or maintain fewer of those leases.

How you communicate and implement this change will vary based on your culture and communication style, but proper communication is key. Companies should be honest that moving to remote work is a long-term investment in the company and its employees. You likely already have some remote employees, so the shift won’t be entirely foreign either.

Read more: The remote work vs. in-office work debate is over: Here’s how to move forward

Moving from leases to on-demand office space

Getting out of an office lease isn’t a simple process, but it’s possible. Every lease, city, and state will have different terms and rules about breaking a lease. In almost every case, it will cost the business money. But in some ways it’s the same as a layoff: you’re cutting a long-term cost by paying a short-term cost. Ultimately you will not only be saving thousands per year per employee, but you will also start only paying for office space when it’s needed.

That’s where the on-demand office space or coworking space comes in. Just because a company is remote does not mean employees don’t get together and collaborate in person regularly, or that employees can’t go to an office to do focused work outside their homes. In fact, it’s just the opposite. On-demand office space gives employees the flexibility to work and collaborate whenever and wherever they want.

With on-demand office space, your company’s workspace spend for employees is as efficient as possible. You are only paying for office space when it’s needed, and you can even set limits on those costs. Most of the technology your company uses today is likely paid for in an on-demand SaaS model, so why shouldn’t your office space?

Larger companies may even choose to maintain some leases in certain geographies and eliminate offices in other areas to cut costs. On-demand office space can supplement those offices if more space is needed and it can take the place of fixed offices in areas with fewer employees.

Make it simple with Flexspace

One convenience that’s lost without a fixed office lease is the simplicity of employees having an office that’s in the same place, on the same bus line, with the same desk, the same conference room setups, and the same amenities. Moving to on-demand office space adds some complexity. Employees have to look for space and find one that suits their needs. Then, book it themselves, and share the location details with everyone coming to meet.

Flexspace helps solve this complex transition. Our goal is to make the on-demand office space booking process as simple as possible so that companies that have shed their office space and moved to remote work can maintain simplicity when going to an office and collaborating. That means simple booking, easy cost management and reporting, and access to a vast global network of workspaces. Book directly through your calendar with our Google calendar integration, along with many other features.

If you’ve recently cut office space or are considering it, Flexspace can help you navigate this complex process. In doing so, you can cut costs and focus on retaining employees and growing your company, even in turbulent times.