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Tech Companies Continue to Cut Back on Real Estate Footprint

The New York Times published an article finding that tech firms are reducing their real estate in the city, and that pullback has been happening for some time. In February, CNN reported Microsoft halted a 90-acre development in Atlanta. Microsoft had offered the construction of affordable housing, programs to help public school children develop digital skills, and support for historically Black colleges and universities on that property, which is all on hold. The company eliminated 10,000 jobs over the last year.

In New York City, more than one-third of its 22 million square feet of available office space for sublet is from tech, advertising, and media companies. Meta, which owns Facebook and Instagram, is trying to eliminate 2.2 million square feet of office space, has laid off a quarter of its New York state workforce, and has decided not to renew leases for over 500,000 square feet in other locations. Spotify and Roku are also trying to sublet much of their real estate. Per the New York Times, the tech sector has been a “driver of New York’s economy since the late 90 dot-com boom.” The growth in tech jobs helped fuel the demand for lots of real estate.

The news is not all bad. Google will move forward with its plans to open a large new office in Lower Manhattan. Amazon has also added 200,000 feet of office space in New York and New Jersey, with a new location opening soon in mid-town. Salesforce told the paper it is holding onto its space in Manhattan.