When Amazon founder Jeff Bezos announced grand 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 on, only two of its office towers in Arlington, Virginia, have opened and 8,000 staff transferred. Original plans included more buildings, retail space and jobs for tens of thousands of people but further construction is on hold as the company grapples with getting employees back to the office.
Amazon’s struggles highlight a broader question facing businesses: as work patterns evolve, what is the future for the corporate headquarters?
Some companies are doubling down on the return to the office, having made huge property bets pre-Covid. From this month, Amazon staff are expected in 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 a full-time office return from March.
In the UK, advertising business WPP — due to open a new London office this month — has asked workers to return four days a week, with chief executive Mark Read saying success “relies on the fundamentals of human connection, creativity and relationships”. The Financial Times reported on Thursday that Citigroup was on course to spend more than £1bn upgrading its Canary Wharf tower.
“Leaders hate seeing empty seats knowing full well how much this real estate is costing them,” says Iain Shorthose, an expert in office experiences at Paragon Workplace Solutions. “This is where it all gets divisive and mandates come in.”
Other employers are taking a different approach, reimagining their corporate headquarters and office spaces to embrace more flexible models of working and new technology. Many hope to downsize space, while upgrading amenities.
HSBC, for example, plans to move from its 45-floor 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 global office space by nearly 40 per cent. Lloyds Banking Group is planning to vacate its current City of London building for a refurbished office nearby, as it upgrades properties and makes them more environmentally sustainable.
Some smaller businesses have ditched the head office altogether. Human resources platform Remote, as its name suggests, has a fully remote workforce, while law firm Dentons has lauded its “polycentric” culture where no one building or region dominates and working from home is commonplace.
But overall offices are still in strong demand. Property group CBRE expects take up of space in the London office market this year and in 2026 to run above the 10-year average of 12mn square feet. Rents for prime City offices grew by 10 per cent last year and CBRE forecasts another 25 per cent rise by 2029. Its survey of 120 companies with office space in Europe showed lease expirations were prompting businesses to rethink the suitability of their space. Of those choosing to relocate, nearly 60 per cent said they wanted smaller premises but better amenities and services for employees. Forty-one per cent wanted to “build the next-generation workplace”.
CBRE is trying to lead by example. As Covid-19 raged, the company retrofitted its old London headquarters, Henrietta House, into a modern building, balancing costs, employee preferences and evolving work trends with the help of two psychologists. Its goal — like that of many other large employers — was to turn the office from a static space into a more dynamic environment.
A priority was providing a flexible and adaptable space that was not just a place to work but a way to engage staff, build better culture and deploy technology to improve employee interactions. It wanted to think beyond office freebies.
“You can give away free sandwiches on a Friday but what brings people in is vibrancy — where an office is 60-80 per cent full,” says Tim Hamilton, who helps clients of CBRE understand what they want from their office space. “No one wants to wonder why they bothered making their way in.”
One popular model is to swap segregated private offices for flexible layouts — with areas such as collaboration zones, tech-enabled meeting rooms and quiet spaces. The idea is that this encourages team work and creativity, rather than rigid, desk-bound work, which can easily be done at home without distractions. “Historically we had 35 per cent amenity space and 65 per cent for personal desks. This has flipped on its head,” says Hamilton.
Many companies are looking to modular furniture and fittings to adapt their offices easily for meetings, socialising or events.
“People realise coming to work physically is about coming together in collaboration,” adds Shorthose. “But there are still a huge number of organisations creating spaces without doing the legwork first about what the people who use the space want from a functional design perspective.”
Technology and environmental factors are other big considerations. At a Workplace Trends conference last year, designers such as Maria Tam, spatial psychologist at Make Architects, suggested video links could be permanently integrated into communal areas so different offices could connect live, as a way to boost informal interactions. At CBRE, staff can use an app that tells them who is in on what day and which desks are available. Heat sensors help facilities managers better understand space usage.
With many business leaders already struggling to manage today’s ways of working, planning for the future is difficult. Companies designing their offices now are having to think to the 2030s and beyond as it can take five to six years before it comes to fruition. “No one knows what the workplace of the future will fully look like,” says Hamilton.
Companies are also having to appeal to younger recruits, who often feel less connected to the workplace, particularly since hybrid work has become commonplace. Shorthose says younger workers do “see the value of going into the workplace, but they don’t want to be told”.
“They want to be trusted to make the right decision that works for them and the business. As long as they see value, they will come in. If you mandate it, it goes against the grain.”
Gianpiero Petriglieri, associate professor of organisational behaviour at Insead, argues that one characteristic that will endure is the physical office serving as a space for spontaneous interactions, building a sense of community and creativity that virtual environments struggle to replicate.
“I have long been convinced that people who miss the office do not miss the office, they miss a space where they could feel free and connected at work . . . Notice that executives, who are likely to have had that experience in their career, often miss it. If the office was not such a space, and home feels more like it, [people] celebrate working from home,” he adds.
Harriet Shortt, associate professor of organisation studies at Bristol Business School, suggests companies think more about bringing people together through eating and drinking. Her research shows “usually the positive connection is over food”.
Catering and facilities management company Compass Group polled more than 30,000 workers and students in 21 countries last year. It found that encouraging sociable moments helped employees look forward to going to work and signalled a commitment to inclusivity, wellbeing 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 come into their place of work more often if there were more opportunities to socialise with colleagues.
Beyond the office walls, corporate headquarters also have an impact on the surrounding community. “As the office buildings fill up, we do expect to see the astronomical growth in demand they’re all promising,” says Roy, who works at Tatte, a café opposite the new Amazon towers in Virginia. “It’s getting a little busier every week.”
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