- Dropbox will pay $79 million to give up 165,000 square feet of office space at its San Francisco HQ.
- The company switched to remote working during the pandemic and workers now follow a ’90/10′ routine.
- CEO Drew Houston has backed remote working, and said the return-to-office push is doomed to fail.
Dropbox is spending $79 million to give up a quarter of its San Francisco headquarters, as it continues to bet that remote working is here to stay.
In an SEC filing initially reported by CNBC, the file-sharing company said it had agreed to pay $79 million in termination fees to surrender 165,244 in office space at its San Francisco headquarters.
Dropbox has been leasing the 736,000 square foot building at Mission Bay since 2017, but a spokesperson for the company told Insider it was looking to “de-cost” its real estate portfolio as the company makes remote work the primary operating model for its employees.
“As we’ve noted in the past, we’ve taken steps to de-cost our real estate portfolio as a result of our transition to Virtual First, our operating model in which remote work is the primary experience for our employees, but where we still come together for planned in-person gatherings,” they said.
“In October 2023, we executed a $79 million buyout with our landlord for 165,244 square feet of our available space for sublease in San Francisco, to be completed and paid over three years.”
It comes after CEO Drew Houston told Fortune that he did not understand why companies are rushing to abandon or limit working from home, and warned CEOs pushing their employees to come back to the office that their workers may not accept it.
“I’d say [to CEOs telling their workers to come back to the office], ‘your employees have options,'” Houston said in an interview with Fortune. “They’re not resources to control.”
Dropbox is one of the few tech companies to not mandate any office time for its employees at all, with most spending 90% of their time working remotely and coming in for a handful of two-to-three-day “offsite” sessions per quarter.
The company also announced in April that it would lay off around 16% of its global workforce.
Dropbox’s move to cut back on its physical office space is a fresh blow to San Francisco, which is going through a commercial real estate crisis. Office vacancy rates in San Francisco currently stand at around 30%, up from 6.3% in the first quarter of 2020, according to data from Jones Lang LaSalle, which was shared by the city. During this time, large tech companies have laid off employees and workers have increasingly chosen to do their jobs from home.
Many CEOs are now seeking to reverse this trend and bring workers back to the office. Some employees are reluctant to do so after remote working became commonplace during the pandemic, causing tension between workers and their bosses.
Both Meta and Amazon have launched controversial new remote working policies, telling employees that they risk losing their jobs if they do not come into the office at least 3 days a week.
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