Most Silicon Valley tech companies started in small garages and gradually upgraded. Today some headquarters have become architectural wonders in their own right. Tech company offices even draw interest for their employee perks like stores, volleyball courts, cafeterias offering free gourmet food, parks, doctors and dry-cleaning on site.
Some examples are Apple’s $5 billion circular ‘spaceship’ headquarter in Cupertino and Amazon’s $4 billion city campus in Seattle.
In March, most tech company offices in the United States have fully or partially closed due to the Covid-19 pandemic. Some tech giants like Google and Facebook have told employees they can keep working from home until summer 2021. Twitter even declared that working remotely will be an option for employees indefinitely.
It looks evident that things in offices are not likely to return the way they were. Even when the pandemic unwinds, workspaces could be changed forever. So what is going to happen to the billion-dollar headquarters?
It’s hard to predict what the future trends will be. Housing costs in the Silicon Valley are extremely high and the housing demand of tech workers was high compared to the actual availability of houses. During the pandemic, there was a movement of employees to the surrounding suburbs or even in other states other than where their companies are based. These movements were driven by the desire of more space, to be closer to families and to have more flexibility. Once people get used to a more flexible way of living, it could be hard for companies to go back to meetings in conference rooms.
Some tech companies like Pinterest believe that Covid is making it possible to have a more distributed workforce and as a consequence, they are changing their real estate plans, paying termination fees for office spaces they were planning on building, subleasing their office spaces.
Other companies are still pushing their real estate expansions, envisioning a new type of headquarters. These are configured like company towns which mix public spaces, stores, housing and traditional offices.
One example is Facebook’s Willow Village, in Menlo Park: its plan includes a hotel, bike paths, an elevated park, a “town square”, a dog park and a grocery store. The plan also includes up to 1,735 housing units which would be made available at below market rates.
Google is considering a similar plan in Mountain View, with a 40 acre live-work environment called Middlefield Park. Construction is expected to begin in 2022.
These campuses would make the remote work decision less complicated for tech workers, and they would also provide remarkable benefits for the residents of the areas.
The choices of big tech company could exacerbate house shortages in dense neighborhoods and provide office space and access to nature. On the other hand, the current situation is highly uncertain and if companies withdraw from their projects or prefer remote work, they could potentially take a piece of local economy with them: the cost of housing would certainly go down, but companies and their employees are an important tax base, hence there would be less tax revenue to invest in essential social services that communities rely on.
What do you think? Will smart working slowly replace working in office and reduce the need of having big headquarters and workspace?