When Amazon founder Jeff Bezos announced big plans for a new headquarters in 2017, he said he was “excited to find a second home” for the fast-growing Seattle-based online retailer.
But eight years later, only two of its office towers in Arlington, Virginia, opened and 8,000 employees were transferred. Original plans included more buildings, commercial space and jobs for tens of thousands of people, but additional work is on hold as the company struggles to get employees back into the office.
Amazon’s struggles highlight a broader question facing companies: As work patterns evolve, what is the future of corporate headquarters?
Some companies are doubling down on returning to the office, having made big real estate bets before Covid. Starting this month, Amazon staff will be expected to work five days a week. US bank JPMorgan Chase, which plans to open a newly built global headquarters in New York next year, has called for the office to return full-time from March.
In the United Kingdom, advertising company WPP, which is opening a new office in London this month, has asked its workers to return four days a week, and chief executive Mark Read said success “depends on the foundations of human connection, creativity and relationships.” The Financial Times reported on Thursday that Citigroup was on track to spend more than £1 billion modernizing its Canary Wharf tower.
“Leaders hate seeing empty seats knowing full well how much this real estate is costing them,” says Iain Shorthose, office experience expert at Paragon Workplace Solutions. “This is where everything becomes divisive and mandates come in.”
Other employers are taking a different approach, reinventing their corporate headquarters and office spaces to embrace more flexible work models and new technologies. Many hope to reduce space while improving amenities.
HSBC, for example, plans to move its 45-storey tower in Canary Wharf to new, smaller premises near St Paul’s Cathedral in the City of London, as part of a proposal to reduce its overall office space by almost a 40 percent. Lloyds Banking Group plans to vacate its current building in the City of London to build a refurbished office nearby as it improves the properties and makes them more environmentally sustainable.
Some smaller companies have abandoned the head office altogether. HR platform Remote, as its name suggests, has a fully remote workforce, while law firm Dentons has praised its “polycentric” culture where no building or region dominates and working from home is common.
But in general offices continue to be in high demand. Property group CBRE expects space occupancy in the London office market this year and in 2026 to exceed the 10-year average of 12 million sq ft. Rents for the city’s main offices grew 10 percent last year and CBRE forecasts another 25 percent increase by 2029. Its survey of 120 companies with office space in Europe showed that lease expirations were driving companies to rethink the suitability of their space. Of those who chose to move, nearly 60 percent said they wanted smaller facilities but better amenities and services for employees. Forty-one percent wanted to “build the next generation workplace.”
CBRE tries to lead by example. As Covid-19 raged, the company retrofitted its former London headquarters, Henrietta House, into a modern building, balancing costs, employee preferences and evolving work trends with the help of two psychologists. Their goal, like many other large employers, was to convert the office from a static space to a more dynamic environment.
A priority was to provide a flexible and adaptable space that was not just a place to work but a way to engage staff, build a better culture and implement technology to improve employee interactions. I wanted to think beyond office gifts.
“You can give away sandwiches on a Friday, but what draws people is the vibrancy — when an office is 60 to 80 percent full,” says Tim Hamilton, who helps CBRE clients understand what they want from your office space. “No one wants to wonder why they bothered to come in.”
A popular model is to move from segregated private offices to flexible layouts, with areas such as collaboration zones, technology-enabled meeting rooms and quiet spaces. The idea is that this encourages teamwork and creativity, rather than rigid, desk-based work, which can easily be done at home without distractions. “Historically we had 35 percent service space and 65 percent personal desk space. This has turned a corner,” says Hamilton.
Many companies look for modular furniture and accessories to easily adapt their offices for meetings, socializing or events.
“People realize that physically coming to work means coming together collaboratively,” adds Shorthose. “But there are still a lot of organizations that create spaces without doing the legwork on what the people using the space want from a functional design perspective.”
Technology and environmental factors are other important considerations. At a Workplace Trends conference last year, designers such as Maria Tam, a spatial psychologist at Make Architects, suggested that video links could be permanently integrated into common areas so that different offices could connect live, as a way to boost informal interactions. . At CBRE, staff can use an app that tells them who is on what day and what desks are available. Heat sensors help facility managers better understand space usage.
With many business leaders already struggling to manage current ways of working, planning for the future is difficult. Companies designing their offices now have to think about the 2030s and beyond, as it may take five to six years before this comes to fruition. “No one knows what the workplace of the future will look like,” says Hamilton.
Companies are also having to attract younger employees, who often feel less connected to the workplace, especially since hybrid work has become commonplace. Shorthose says younger workers “see the value in coming to the workplace, but they don’t want to be told that.”
“They want to be trusted to make the right decision that works for them and the company. As long as they see value, they will enter. If you demand it, it goes against the grain.”
Gianpiero Petriglieri, associate professor of organizational behavior at Insead, argues that one characteristic that will endure is that the physical office serves as a space for spontaneous interactions, generating a sense of community and creativity that virtual environments struggle to replicate.
“I have long been convinced that people who miss the office don’t miss the office, they miss a space where they can feel free and connected at work. . . Note that executives, who have likely had that experience in their career, often overlook it. If the office were not that space and the home seemed more like it, [people] Celebrate working from home,” he adds.
Harriet Shortt, associate professor of organizational studies at Bristol Business School, suggests companies think more about bringing people together through food and drink. Their research shows that “positive connection usually has to do with food.”
Catering and facilities management company Compass Group surveyed more than 30,000 workers and students in 21 countries last year. It found that encouraging social moments helped employees look forward to coming to work and signaled a commitment to inclusion, well-being and career progression. More than a quarter of employees said they felt lonely or isolated at work. Among hybrid workers, nearly half said they would go to their workplace more often if there were more opportunities to socialize with colleagues.
Beyond the office walls, corporate headquarters also have an impact on the surrounding community. “As office buildings fill up, we expect to see the astronomical growth in demand that everyone is promising,” says Roy, who works at Tatte, a coffee shop across from Amazon’s new towers in Virginia. “Every week there is a little more activity.”