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Slack Downsizes Office Space; WeWork Partners on Flex Workspaces

Image: ElenaBs - Alamy Stock Vector

Image: ElenaBs - Alamy Stock Vector
Welcome to the latest WorkSpace Connect News Wrap, our periodic recap of the news related to the modern workplace, the professionals that make it happen, and the products and services that enable it. In this edition, we take a look at a technology provider downsizing its office space and then a partnership to create a global network of flexible workplaces.
Slack Subleases One of Its San Francisco Offices
Last week, Slack joined the rank of companies like Yelp and Airbnb and announced its downsizing its physical office presence by subleasing its 45 Fremont St. office, according to this SFGate article.
While it will be shuttering this location, Slack will still retain its headquarters close to the Salesforce Tower two blocks away, and employees will be able to access Salesforce (which acquired Slack last year) office spaces, a Slack spokesperson told SFGate. “Slack will remain a digital-first company, with physical offices serving as just one of the tools available to support collaboration," a company spokesperson told SFGate.
Throughout the pandemic, we’ve seen companies around the globe downsize, streamline, or relocate their real estate holdings. However, how much physical office space is needed post-pandemic is still very much up for debate. In a survey of 1,325 CEOs, professional service firm KPMG found that 51% of them are investing in shared office space. Also notable: The 2020 CEO pulse survey had found that 69% of respondents were planning on downsizing, but that sentiment has sharply decreased with only 21% are planning to downsize their physical footprint now.
The debate on how much real estate workplaces will need also directly ties into what working model will rise to prominence post-pandemic. Recently, Slack also released results from its Future Forum Pulse study, which my colleague Lisa Schmeiser shared in a WorkSpace Connect News Wrap. The survey found 58% of workplaces are using a hybrid work model, with 30% of workers were going into the office every day. Additionally, workers largely favored flexibility in terms of location (78%) and schedule (95%).
WeWork Partners Up With Upflex
WeWork announced a partnership with flexible workplace startup Upflex to create a global network of over 5,500 locations for both their clients. With the partnership, WeWork will become the exclusive workspace operator to sell Upflex spaces to its members, who now have access to Upflex's portfolio of over 4,800 workspaces. Similarly, Upflex will now have access to WeWork spaces, which there is over 800 locations, allowing its customers to book workspaces at WeWork locations through the Upflex platform. As part of the deal, WeWork will also participate in the next round of Series A funding for Upflex.
Coworking and flexible work service like WeWork saw their usage decline in the early days of the pandemic, but now some workplaces are turning to them to create hybrid workplaces. While predicting a rebound in 2022, real estate company CBRE stated that 144 flexible office providers reduced their real estate footprint by 12.2 million square feet across 42 U.S. markets, with Manhattan, San Francisco, and Los Angeles accounting for the largest declines. However, in 2022, CBRE enterprises will increasingly turn to flexible workspace services like WeWork, as they provide the ability to change workplace strategies more easily and can be a tool to recruit new talent.