IBM is pulling the plug on a large office space it leases from WeWork.
The technology giant will leave the 70,000-square-foot space it leases from WeWork at 88 University Place sometime around Labor Day, Business Insider reported. IBM will continue to lease office space from WeWork in Chicago and London.
When the two parties struck a deal in 2017, it marked a turning point for WeWork, which was trying to expand past the market for freelancers and into the market for corporate clients.
But in recent months, WeWork has faced tensions with its renters, who have called the company’s continued charging of fees during the pandemic “unlawful.” The company has said it must keep offices open for those of its users considered essential. Earlier this month, WeWork’s valuation fell to $2.9 billion, a far cry from $47 billion a year ago.
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WeWork's valuation drops to $2.9B
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Now, as remote work grows in appeal, major companies are reevaluating their physical footprints — leading to growing concerns about the broader office sector. Mark Zuckerburg announced this week that Facebook estimates that half its workforce could transition to remote work over the next decade. Others, including Twitter and Shopify, have signalled they would move toward working from home permanently.
A shift toward remote working could also upend business models such as WeWork’s, which depended on the appeal of a reimagined in-person office culture. [Business Insider] — Georgia Kromrei