Facebook parent Meta to shrink some offices as it adapts to hybrid work

Meta Platforms Inc. plans to shrink some of its offices as many of its employees continue to do their jobs from home, the latest large company to reassess its real estate in the hybrid-work era.

The social-media giant will rearrange some office layouts, clustering desks and teams together to effectively put employees in closer proximity, the company’s top real-estate executive said in an interview. The goal, he said, is to make the spaces more dynamic.

"One of our jobs is to recalibrate our space," said John Tenanes, vice president of global facilities and real estate at Meta. "We’re creating a smaller venue, and for the same amount of folks, but it’s a smaller venue and we’re hoping that really drives a life in the building: more energy, more activity."

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Mr. Tenanes said it was too early to quantify how much the company’s overall real-estate footprint could shift and he didn’t comment on specific locations or cities likely to see changes. He added that Meta also continues to open new offices in some places.

Meta Chief Executive Mark Zuckerberg notified employees in an all-hands session last Thursday that the company would implement a hiring freeze and take other steps to reduce the company’s costs, according to people familiar with the matter.

As it reviews its physical spaces, Meta may let some existing office leases expire or could potentially consolidate floors across multiple buildings into a single one, Mr. Tenanes said. The company is also evaluating whether to hold on to offices in buildings where it never moved in or where it may still be building out spaces, he said, without giving details.

Ticker	Security	Last	Change	Change %
META	META PLATFORMS INC.	569.20	-4.34	-0.76%

Last month, the company opened its new office in Midtown Manhattan’s redeveloped Farley Building, a post office from 1912; the company also recently opened an office in San Diego. At the same time, Meta plans to close an existing office at 225 Park Avenue South in New York. Bloomberg News earlier reported that it would exercise an option to terminate its lease in that space.

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A Meta spokesman said the Park Avenue office served as a bridge for the company to open other offices in New York, and that it remains committed to having a presence in the city.

The parent to Instagram and Facebook has given its employees a wide degree of flexibility to determine how they work. It has offered most employees the option to do their jobs remotely full time or to select a mix of in-office and home work.

While Mr. Tenanes said the parking lot of the company’s Menlo Park, Calif., headquarters is often busy these days, office occupancy remains down across the company. Today, Meta’s offices are less than 50% full, he said. Before the pandemic, the company’s offices were about 75% occupied on any given today, he said. Meta had 83,553 employees at the end of June.

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Nationally, the average office occupancy in 10 major U.S. cities has recently hit pandemic-era highs but remains below 50%, according to data from security provider Kastle Systems.

A number of companies, including Yelp Inc., have said in recent months that they will shed some excess office space as workers stay at home. Others, like KPMG LLP, plan to open new spaces that are significantly smaller. KPMG will shrink its New York office space by more than 40% when it moves into a new U.S. headquarters on Manhattan’s West Side in 2025.

The move to hybrid work has helped to push office vacancy rates higher. In the second quarter, roughly 19% of office space was vacant, according to brokerage JLL.

In recent months, Meta’s real-estate team has engaged in what Mr. Tenanes described as "vibe planning" of its offices. Just as city planners try to design urban centers to create a sense of energy and activity, Meta executives have been working to make offices more dynamic, he said. Some employees will lose their individual desks and shift to "neighborhoods" with desks that can be reserved or used on a drop-in basis. Related teams will be situated near each other.

Ticker	Security	Last	Change	Change %
YELP	YELP INC.	38.55	+0.33	+0.86%

Additional equipment is also on the way. Meta spent about six months working with a furniture manufacturer to design specialized noise-canceling cubicles that it plans to install throughout its offices in the coming months. The cubes should allow people to remain in the open office, but to take video calls while being less disruptive to co-workers, Mr. Tenanes said. The cubes include an audio system that could, for example, play sounds of the ocean.

The company will devote about 10% of its office floor space to the new cubes, he said.

"You can talk and your neighbor couldn’t hear you," he said. "It’s like a self cocoon."

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Some office plans could still change. Physical space will always have a role at the company, Mr. Tenanes said. The company remains in what he called a year of learning until executives have a clearer sense of employees’ rhythms and patterns for using its offices.

"At the end of this year, we’ll know more, and we’ll adjust our space," he said.