TOP TECH FIRMS AND STARTUPS TO REDUCE OFFICE SPACE; LOOKING AT HYBRID-MODELS: REPORT! 

With lockdown taking over the country, most of the IT companies initiated work from home (wfh) option for employees. From top tech companies to startups in India all are giving up office space, even their rented buildings and seats in co-working centres, just to cut costs amidst business crisis. 

This move has been taken up by companies as most of the employees are not returning to work anytime soon, possibly for the rest of the year.  

As per LiveMint report, companies such as Uber Technologies Inc, Swiggy, PolicyBazaar, Instamojo, Ezetap, MobiKwik, upGrad and others have reduced their real estate footprint and are letting go of office space across metro cities.

Getting into details about each firm, Softbank-backed insurance unicorn PolicyBazaar has recently given up four of its 12 office buildings in Gurugram. This decision came up after the company has seen business lines like lending registering a steep drop in demand. Even MobiKwik does not want to let go of its Gurugram headquarters, but are looking into re-negotiating rental agreements. “We have also considered reducing our real estate footprint and have not opened our offices since the first lockdown. We expect to operate from home for the next few months, and have let go of one of our five rented satellite offices," Upasana Taku, co-founder of MobiKwik, a digital payment startup said.

Meanwhile, a Swiggy spokesperson said that the effect of the pandemic has altered its utilisation of real estate. “…It forms a significant part of our ongoing fixed costs and hence, we have optimized our network of kitchens and rationalized office space across cities. We have scaled down our cloud kitchens temporarily or permanently depending on profitability profile, and carefully reduced real estate usage by consolidating many of our smaller offices," the spokesperson said. Taking a look at the crisis and impact, Swiggy has shut down offices in tier 3 and 4 cities and aims to reduce real estate space further. 

Few firms and startups in Bangalore like Ezetap, a payment solution provider, have decided to let go of one of its offices in HSR Layout in the city, and reduced 35 percent of its rented space. “The WFH scenario at Ezetap has worked well for all employees so far, as we see an increase in productivity from employees. WFH has also allowed us to save on certain other add-on operational expenses like food and pantry expenses, housekeeping charges, office broadband, electricity etc," said Byas Nambisan, CEO, Ezetap.

Looking into other firms, Uber recently shut its Mumbai office after laying off 600 employees in May. Even, two-wheeler mobility startup Bounce is deciding to lease out 150 seats at its JP Nagar office in Bengaluru, for a short-term. While other startups like Vayana Network and CashKaro have also let go of offices in different locations, LiveMint further reported.

However, Edtech startup upGrad too has also let go of multiple co-working spaces across six cities. Past few weeks, startups are also looking at hybrid-models, where they will get back teams on a rotational basis, to reduce the risk of spreading covid-19 to employees. This new model will begin from September. 

“We are evaluating a hybrid model for our corporate office in Bengaluru", said the Swiggy spokesperson. This new model will be kept in mind after the pandemic is over, where teams can come to the office on a rotational basis, keeping all safety precautions in mind.