Half of UK firms to cut office space

Half of UK businesses expect to reduce the size of their office space, with a third looking to cut it down by 30%, according to a new report.

PricewaterhouseCoopers (PwC) surveyed 258 C-Suite executives and over senior employees of the UK's largest companies and their proposed cuts roughly equated to nine million square feet of space.

The finding indicates an appetite for 'hybrid work' models in the UK, where employees mix remote and in-office shifts, with around 71% of the respondents planning to increase investment in technology to enable more agile work models over the next two years.

As such, only 10% of those surveyed agreed that the level of employees working in the office will match that of pre-pandemic levels, despite taking into account the speed of the vaccine roll out. The consensus from the survey among the senior executives is that staff will continue working remotely for two or three days a week.

"The figures couldn't be more clear, the shift to hybrid working, with part of your time at home and part in the office, is pretty much embedded into the working culture of many organisations," said Angus Johnson, the UK real estate leader for PwC UK. "So much so that a significant proportion of the businesses we spoke to are planning to reduce their office portfolio, which could lead to up to nine million square feet of vacant space.

"However, it's clear that the role of the office is not going to disappear. We may see an increased demand for flexible space as many businesses' operating models may well need that option if holding dead space is to be avoided. It's also clear that the nature and purpose of office space are going to change."

Many of the respondents are said to be implementing 'subleasing' models and exploring partnerships for shared office space. What's more, 51% of the organisations with 100 employees or more already have a workplace strategy that considers the long-term impact of COVID.