1. Reads
  2. Lite

Will Office Spaces Disappear as Employees Work from Home During the Coronavirus Pandemic?

Former Managing Director of Ahmedabad Stock Exchange
Jul 23, 2020 4:50 PM 3 min read

As per a report published by USA Today, about half of US Employees worked from home during the COVID-19 lockdowns, according to the Brookings Institution. And many companies – including Facebook, Google, Twitter and Morgan Stanley – plan to continue allowing at least some staffers to telework at least some of the time even after a COVID-19 vaccine is available and the health crisis is over.  

In India, seven in 10 employees say their companies have allowed complete work from home till the current situation normalises, as per a survey conducted by sleep and home solutions company That could mean a substantial downsizing of the office market in India and the vibrant urban centers that have flourished around them. This in turn will batter the business of restaurants and high-end retailers that rely on the white-collar workers’ office lunch, dining out and after-work spending. Software jobs and other white-collar jobs are a high employment multiplier. 

In simple terms, the employment multiplier measures the amount of direct, indirect and induced jobs created in the area. Direct jobs are related to the specific industry, while indirect jobs are those that support the industry. Induced jobs are those that are a result of direct/indirect employee’s spending money in the community. Service sector companies generate about five times as many indirect jobs as direct jobs.

India is now an almost 625 million sq ft office market - supply addition grew by more than 80% on an annual basis in 2019. Four cities – Hyderabad, Bangalore, NCR and Mumbai – accounted for more than 80% of this supply addition. Even a noticeable pullback in the office footprint could have a tangible impact on local economies, reducing city tax revenues, dampening office construction, increasing defaults on commercial loans (and thus hurting banks) and threatening nearby restaurants and shops, say Victor Calanog and Mark Zandi, Head Commercial Real Estate Economics and Chief Economist respectively at Moody’s Analytics. 

To be sure, analysts don’t predict an abandonment of offices completely. In fact, more office space could well be needed in the short term to accommodate social distancing requirements until a coronavirus vaccine is found. A Gartner survey of 317 CFOs and Finance leaders revealed that 74% will move at least 5% of their previously on-site workforce to permanently remote positions post-COVID-19. In a blog post in May, Twitter’s Vice President of People, Jennifer Christie has allowed its employees to work from home “forever.” According to the post, “we were uniquely positioned to respond quickly and allow folks to work from home given our emphasis on decentralisation and supporting a distributed workforce capable of working from anywhere.” Also, social media giant Facebook, search engine giant Google and software giant Microsoft have embraced remote working for their employees even after the pandemic stops. 


Will Office Spaces Disappear as Employees Work from Home During the Coronavirus Pandemic?


"Once things are normal, over a period of time, probably 50% of employees will come to office and the rest will work from home. Moving on, 66% will be in office but 33% will work permanently from home" Richard Lobo, Executive Vice President and Head HR of Infosys was quoted by Business Today. 

IT giant, IBM is planning to increase the focus on work from home (WFH). The company has decided to make 75% of its workforce to work from home.

The tech firm is planning to discontinue lease agreements at almost half of its offices in major cities in India. The company believes that WFH will become more mainstream in the near future. Only 25% of the employees will continue to work from office in the coming months.

Permanent shifting of some jobs to work from home mode, even after the pandemic ends, could lead to a 25% office space being vacated. A similar percent of indirect and induced jobs could be lost, leading to an overall deceleration in the growth of commercial real estate, hospitality and high-end retail sectors.


The cut-throat world of Business and Finance means that there is fresh News everyday. But don't worry, we got you. Subscribe to our Wrap Up Newsletter and get commentaries like the above straight to your inbox.