Google parent company Alphabet is making good on its commitment to profitable growth, pushing to extend a yearslong real estate reduction streak by shedding more Silicon Valley office space through subleasing.
The Mountain View, California-based tech giant listed two office buildings it has leased for nearly a decade in nearby San Jose, according to marketing materials viewed by CoStar News. The listings, encompassing just shy of 174,000 square feet across 2600-2610 N. First St. and 75 E. Trimble Road, mark the latest addition to a growing pile of spaces across the country the company is looking to offload.
Google initially signed the lease for the two Silicon Valley properties in late 2015, according to CoStar data. Neither Google nor Colliers, the brokerage enlisted to help market the properties, responded to CoStar News' requests to comment on the latest listing.
Similar to other tech companies around the world, Google has been on an aggressive cutting spree since the beginning of 2023. The cuts have reversed a decade of expansion that was fueled by soaring demand for its products and services, leading the company to lease, develop or acquire large swaths of space to accommodate its record headcount growth.
"As we work to ensure that our real estate investments match the needs of our hybrid workforce, we're ending leases for a number of unoccupied spaces," a Google spokesperson recently told CoStar News. "We remain committed to our long-standing presence in the Bay Area and investing in the local community."
Alphabet is looking to redirect the saved expenses from trimming its previously vast real estate portfolio toward high-priority initiatives such as artificial intelligence.
The company paid more than $1.8 billion in expenses last year related to its restructuring plans, including one of the biggest layoff rounds in Alphabet's history as well as a series of office closings across the country.
Alongside the expenses related to reducing its global real estate holdings, the Silicon Valley company paid more than $2.1 billion in 2023 in severance and other charges related to reducing its workforce. Alphabet employed about 182,500 people by the end of 2023, according to company filings, down from the more than 190,230-person workforce it had the year prior and an unprecedented drop after decades of significant growth.
The focus on profitable growth is shared among other Silicon Valley tech companies that have responded by making deep cuts to their property holdings by shutting office locations, subleasing out unwanted space, terminating prelease agreements and walking away from future investments. Those decisions have loaded up the Bay Area's real estate market with millions of square feet of available office space.
Google's latest sublease listing would add to the roughly 2 million square feet of office space it offloaded last year across several offices near its Mountain View headquarters.