Has the Great Office Downsizing Begun?
Plus, our on-demand State of Flex webinar is now available!
👋 Happy Tuesday! The Texas Legislature passed a bipartisan bill allowing state agencies to set their own remote work policies, reversing Governor Abbott's March order that sent all state workers back to the office. After agencies scrambled to find space and employees faced brutal commutes or considered quitting, the bill now heads to Abbott's desk with strong bipartisan support.
In this week’s edition:
🏢 US Office Footprint Shrinks
📊 Top 5 Most Flexible Industries
🎥 On-Demand State of Flex webinar
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THIS WEEK’S FLEX FOCUS 🔍
US Office Footprint Shrinks for First Time in 25 Years
For the first time in at least 25 years, more US office space is disappearing than being built. CBRE data shows 23.3 million square feet slated for demolition or conversion this year, while only 12.7 million square feet of new construction will come online.
This isn't just about square footage—it's about America fundamentally rethinking work itself. With vacancy rates still near record highs at 19%, developers are betting that converting empty towers into apartments makes more sense than waiting for workers who may never return. Since 2016, these conversions have already created 33,000 residential units.
As some companies demand employees return to the office, the physical infrastructure of corporate America is being dismantled around them. While leasing activity shows signs of recovery, the market is voting with demolition crews. The question isn't whether office space will recover, but whether this permanent downsizing represents the new equilibrium, or the beginning of something even more dramatic.
FLEX EVENTS 🎥
On-Demand State of Flex Webinar Now Available!
Missed our live event on June 4th? Now you can catch up on all the latest data, insights, and trends with the on-demand recording!
Here’s a sneak peek of what you’ll learn from the on-demand session:
Our brand new Flex Report findings (including that eye-opening Fortune 500 deep-dive) with Work Forward’s Brian Elliott
Latest research from Stanford's Nick Bloom and BCG's Debbie Lovich
The past, present & future of the Flex Index with co-founder Rob Sadow
Access the on-demand recording by following the link below 👇
View the presentation from State of Flex.
FLEX WORK QUICK HITS 💥
Stay ahead of the curve with our curated roundup of the trending flexible work stories making waves right now. Here's what you need to know 👇
Inc.: U.S. workers spend an average of 2.8 hours per week dealing with workplace conflicts instead of core tasks, costing companies roughly $350 billion annually in lost productivity.
Forbes: Remote work isn't the problem—it simply reveals underlying organizational issues like misalignment, poor communication, and unclear goals that forcing employees back to the office masks rather than solves.
The Times: HSBC is threatening to cut pay packages for employees who don't return to the office, sparking debate over whether remote workers should face salary reductions based on geographic location and in-person contribution.
TechRadar: 70% of businesses have integrated AI to enhance communication and workflows as AI emerges as the key factor shaping hybrid work's future, with 88% of teams now using AI tools at least weekly.
STAT OF THE WEEK 📈
Top 5 Most Flexible Industries
Technology and Insurance continue to be the top two industries for flexibility in the United States. 95% of US Tech firms offer work location flexibility, along with 91% of US Insurance firms.
Financial Services comes back into the top five with 83% of firms offering work location flexibility. Professional Services and Media & Entertainment round out the list, despite the Washington Post moving to Full Time In Office.
FLEXPERT INSIGHTS 🧠
Remote Work, Employee Mix, and Performance
A new National Bureau of Economic Research (NBER) working paper from researchers including Stanford's Nick Bloom reveals a crucial nuance in the remote work debate—it's not just about where people work, but how they're integrated into the organization. The Turkish call center study showed that while remote starters gained experience faster initially, office-trained workers eventually surpassed them in performance and were far less likely to quit.
The research also found that fully remote work increased both productivity and gender diversity, with quieter home environments enabling faster, more accurate customer interactions.
The implication isn't a return to office mandates. It's recognizing that even in a fully remote world, those critical first weeks of connection, mentoring, and cultural immersion matter enormously for long-term success.
COMPANY SPOTLIGHT ✨
DocuSign, founded in 2003, provides digital transaction management services enabling users to sign, send, and manage documents electronically. The company's mission is to accelerate business and simplify life for companies and people around the world. With its headquarters in San Francisco, California, DocuSign has offices in multiple locations globally.