Microsoft is the latest tech giant to announce plans to sublease office space in San Francisco, a sign that cost-cutting is continuing in the sector. The company has listed up to 49,000 square feet of space in the city’s tallest tower, 555 California St., for sublease through May 2029.<\/p>\n
The move comes just weeks after Microsoft opened a new artificial intelligence lab in the same building, where it is offering free co-working space for clients. However, the company is also laying off employees, with its LinkedIn subsidiary recently cutting 668 jobs.<\/p>\n
The 779-foot-tall 555 California St. is owned by Vornado Realty Trust and former President Donald Trump. The building is still mostly leased, with tenants including Goldman Sachs, Morgan Stanley, McKinsey & Co., and KKR. However, the recent subleases by Microsoft and other tech companies are a sign that the office market in San Francisco is softening.<\/p>\n
Microsoft’s decision to sublease office space is a reflection of the broader trend of tech companies downsizing their physical presence in San Francisco. The city’s office vacancy rate hit a record-high 34% in September, as more and more employees continue to work remotely.<\/p>\n
Other tech giants that have subleased office space in San Francisco in recent months include Meta and LinkedIn.<\/p>\n