Google To Resume Spending On Office Investment, Construction
One of the tech industry's leading lights is heading back to the office. Well, its money is, anyway.
Google is resuming its investments in the construction of new office space and the acquisition and fit-out of already-built offices after curtailing such activity in the early stages of the coronavirus pandemic, according to parent company Alphabet Inc.'s Feb. 2 earnings call with analysts. Alphabet Chief Financial Officer Ruth Porat said that its office construction would account for "a sizable increase in capital expenditure in 2021."
Google anticipates needing more office space to accommodate a hiring surge, precipitated by the success of its cloud computing services and the continued ubiquity of its internet advertising tools. The company's total fiscal year revenue jumped from $162B in 2019 to $183B in 2020, a 13% increase. Its total income from operations increased by 29% over the same interval, in part because it managed to cut costs in reaction to pandemic-imposed conditions, Porat said.
The commitment to office use comes with a sigh of relief from the commercial real estate market, considering that the tech industry on the whole often follows Google's lead in matters of corporate strategy, CoStar reports. Even if other companies don't follow Google back to the office, its space needs have historically been so great as to make a huge impact in whichever markets it chooses.
Though Google might be confident in its long-term need for offices, its workers won't be using them for months yet. The web giant has extended remote work for all office-using employees through the summer, but in the meantime, the company has made its offices available for the distribution of coronavirus vaccines.