Alphabet Sustains $500 Million in Costs After Google Office Space Downsizing

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What’s going on: 

Alphabet, parent company of Google, has disclosed that it will incur around $500 million in the first quarter of the year on expenses related to its global office space — a sum that doesn’t yet account for how much space it will be relinquishing.  

Why it matters: 

The tech industry’s diminishing need for office space may prove to be a major setback for the already weakened office market, given that its expansion has been a major contributor to overall U.S. office leasing in the past decade, according to CBRE data. 

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This decrease in personnel has come as a surprise, as Google had recently planned to invest almost $9.5 billion in U.S. offices and data centers for 2022, a dramatic increase from the previous year’s $7 billion.  

How it’ll impact the future:  

In the Securities and Exchange Commission filing, Alphabet hinted that further decreases in office space utilization could be on the horizon — whilst simultaneously pledging to invest more heavily in their technical infrastructure, according to Chief Financial Officer Ruth Porat. 

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