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Case Studies in Reducing Office Space

In its quest to reduce unused office space, the GSA recently put together quite an interesting workspace utilization report. The agency has since taken its own advice, reducing office space by 50% and getting rid of six leases totaling $24 million dollars. Below are highlights from a couple of the case studies covered in the GSA report that might spark some ideas for your business. While a smaller organization won’t see the same cost savings, the ROI can still be substantial.

IBM Offers 1 Desk per 1 Dozen Workers

Over the past ten years, IBM has realized more than 1 BILLION dollars in global real estate savings by transitioning employees to telework. But the initiative started with just one office—a pilot site in Norfolk, Virginia. The move was prompted by the desire of clients and employees to be able to work together more closely at client locations. The corporation examined the issue for 8 months to come up with a workable solution. They tested the solution, communicated effectively with employees about the changes, asked for feedback, and even hired a behavioral psychologist to help the team transition.

All this preliminary work paid off. After 3 years of pilot programs in offices that had leases about to expire, IBM was able to implement its mobile work initiative on a national basis in a period of just 2 weeks. Today, IBM offices in the U.S. are designed to house management and have many collaborative spaces for employees to use on a drop-in basis. The results are astonishing: “Today, 39 percent of IBM’s 300,000-member worldwide staff works in some type of a remote environment and the 4:1 staff-to-desk ratio has been gradually increased to an average of 12:1.”

Sabre Takes the Sword to Office Space

In 2006, Sabre Holdings owned 5 headquarters offices, with space allocation of about 350 square feet per employee. The company was building 2 large LEED-certified office spaces and wanted to find a way to fit all existing staff into the new locations. This was before occupancy monitoring at the workstation level was common, so they used security checkpoint data to see how often employees were on site. Even with this basic data, they determined that only 60-65% of workers were in the office on a given day.

Reducing the square footage per employee to 250 square feet was definitely feasible. But fitting everyone into the new offices would take a few adjustments:

  • Doing away with executive offices
  • Providing more meeting rooms
  • Standardizing cubicles and technology to make hot-desking work

Some workstations would be permanently assigned, while a percentage would be available on a flexible basis. With a ratio of 1.35 employees per cubicle, the “FlexSpace” initiative was a much less aggressive approach than the one taken by IBM. But it still allowed the company to cut $10 million in expenses within 3 years. That’s the kind of decision that can make a big difference in the lives of average workers. As the CFO of Sabre pointed out, “Ten million dollars is worth 100 jobs, when you consider all the costs.” Getting rid of desks is certainly better than getting rid of employees!

Are you considering significantly reducing office space at your company? Let us help out with our no-charge space planning consultation.


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