Office vacancies hit a new high in 2024 despite return-to-office push

Despite pressure from the county’s biggest companies to get workers back in the office, the rise of hybrid and remote work has led to record-high vacancies.

Office vacancies peaked in the fourth quarter of last year, with 20.4% of office space in the nation’s top 50 metro areas sitting empty, according to the financial services firm Moody’s. For the same quarter a year earlier, the vacancy rate was a bit lower — at 19.6%.

“Five years since the adoption of the widespread hybrid and remote working models, a new regime is forming which has led to a permanent reduction in office demand.” Moody’s said in a note last week.

The agency noted that newer buildings, designed to enhance in-person collaboration while reducing the need for permanent offices and cubicles, have been more successful.

The news follows a growing trend among major companies such as Amazon (AMZN-0.96%), AT&T (T-1.11%), and most recently JPMorgan Chase, all of which have recently ordered employees to return to the office, rolling back flexible hybrid-work policies.

Amazon, however, has faced some challenges with this shift. The company originally planned to require all employees to return to the office five days a week starting January 2, 2025. But according to internal communications obtained by Business Insider, some locations are not yet equipped to accommodate the full workforce.

When explaining their return-to-office (RTO) mandates, companies tend to say it will boost productivity, improve work culture, and facilitate teamwork. But according to a recent survey, another big reason companies are choosing to make workers return to the office is because they’re tired of paying for empty office space.

Resume.org asked 900 business leaders to tell them about their remote work policies. One in three reported that they were implementing RTO policies because of existing office lease agreements.

Some experts, however, have characterized RTO mandates as a method of reducing headcount while avoiding the costs associated with layoffs.

– Ben Kesslen contributed to this report.