June 5, 2009
We’ve been saying for some time that office vacancy will continue to climb for sometime even if the employment numbers begins to stabilize. Despite all their efforts to be proactive, most companies are reactive to economic conditions when they are deteriorating. As a result, we see companies continuing to go deeper when considering cuts to headcount, the single largest line item for a super majority of companies. Following that, we have facilities, which are directly linked to headcount.
TechCrunch is featuring an article on MySpace and their decision to abandon a highly-touted new office that was planned in Playa Vista, in Southern California. The company had originally planned to move some 2000 employees to a new 300,000+ SF campus, and made a lot of noise about it last year. Those plans have now been shelved.
In addition, TechCrunch is reporting hearing that Fox Interactive (the parent group of MySpace and IGN) has the San Francisco office in its sights as the next office to get cut. We’re not sure if this office is set to go in its entirety, or if they’re just cutting headcount, but this is pretty interesting because early this year Fox Interactive inked a deal to expand its presence at 625 Second Street in San Francisco, from 35K to 105K.
- Yahoo! To Axe 1500 Employees By Year-End; Consolidate Facilities
- Yahoo! To Cut 700 More
- Adobe to Cut 600; Yahoo Layoffs Next Week
- WSJ Article Illustrates Office Space Demand Weakness
- Applied Materials May Cut Up To 15% of Workforce