Thread regarding IBM layoffs

[Complete Statesman article referenced by OP quoted below].

IBM signs lease for entire 15-story office tower at Austin's Domain mixed-use development --

By: Shonda Novak
Published 7:02 a.m. CT Sept. 6, 2024 | Updated 7:02 a.m. CT Sept. 6, 2024

In the largest Austin office lease so far this year, IBM will lease an entire 15-story office tower at the Domain, the company confirmed Thursday.

The lease, for 320,000 square feet of space, is good news for Austin's real estate market and for the Domain, local commercial real estate brokers said. It's a bright spot amid a major ongoing slump in the office market as many employees continue to work remotely or on a hybrid basis and companies scale back on office space, although brokers say there are some positive signs on the horizon.

Laura Gallardo, an IBM spokeswoman, said the company plans to move its nearby campus on Burnet Road into the Domain 12 tower in 2026. Located off of North MoPac Boulevard (Loop 1) and Burnet Road, the Domain is a popular mixed-use development that has become known as Austin's "second downtown."

"Austin is an extraordinary — and growing — center of talent innovation, and IBM remains committed to investing in new experiences for our clients and employees in this market," company officials said in a statement. "We expect to move Austin-based IBMers into new, modern offices in 2026. This Austin, TX facility investment will establish an even stronger ecosystem for IBM, its clients and partners, building on our more than 55-year tenure here.”

IBM declined to disclose its Austin headcount. The company also would not comment on whether, or by how much, it plans to grow its local workforce once it moves into Domain 12.

IBM will take over the lease at Domain 12 from Meta Platforms, Facebook's parent company, and extend the lease from 2031 to 2040. IBM will assume the lease on Jan. 1, 2026.

With IBM, a Fortune 100 technology company, Cousins Properties adds a new tenant to its portfolio. Cousins said the lease is for all 320,000 square feet in its Domain 12 office tower.

Cousins, a real estate investment trust based in Atlanta, is the largest owner of office space in the Domain, with about 2.5 million square feet of space across 11 buildings.

"Cousins is excited to have IBM join its family of great companies at the Domain, and was pleased we could assist Meta as it right-sizes its office space in Austin," said Tim Hendricks, senior vice president and managing director for Cousins in Austin. Other Cousins tenants at the Domain include Amazon, Expedia, Adobe and Fidelity.

Previously, IBM planned to lease space in a building called OneTerra that Houston-based Hines intended to break ground on late last year on the north end of the Domain, but that deal is off.

“Hines and IBM have terminated the lease agreement for IBM to serve as a key tenant at OneTerra," IBM's statement said. "Hines and IBM maintain a strong, positive relationship and look forward to continuing our work on other strategic partnerships, both now and in the future. Hines is actively engaged in conversations with other potential tenants."

Domain 12 has its own café, outdoor terraces, fitness center, bike storage and access to numerous hike and bike trails, Cousins' release said. The tower has nine stories of office space atop several levels of parking.

Completed in 2020, Domain 12 is adjacent to a multitude of dining, shopping and entertainment options.

In recent years, Austin office brokers have said employers continue to gravitate to the Domain because their employees want to be next to all it has to offer.

"We are excited that our teams found a creative solution to welcome another global technology innovator to a trophy property in The Domain," Colin Connolly, president and CEO of Cousins Properties, said in a news release. "The Domain provides a highly amenitized experience that leading companies recognize as a critical tool to drive employee recruitment, retention, and culture. We are thrilled to see growing customer demand for lifestyle office properties in Austin."

Locally and nationally, the office market has changed dramatically as more employees work either remotely or on hybrid schedules. Many companies, including those in the tech sector, have been downsizing, freezing hiring and reducing their footprints, leaving buildings with a glut of empty space.

Google, for instance, has yet to move into an entire 35-story building it has leased, a sail-shaped tower in downtown Austin overlooking Lady Bird Lake. And Meta is still trying to sublease nearly 600,000 square feet of office space in the new 66-story Sixth and Guadalupe mixed-use tower in downtown Austin.

Vacant space has been mounting across the Austin region. The vacancy rate for top-tier (Class A) space hit 29.48% by the end of June, up from 25.86% by the end of June last year, according to Cushman & Wakefield, which tracks the Austin-area office market.

Although the Austin-area office market has been distressed for the past 18 months or so, there already are signs better days could be ahead, Hendricks said, citing IBM's lease and the fact that California-based Nvidia Corp. and other office prospects are looking for space in the market.

[Complete Bizjournal article referenced by OP quoted below].

Meta sheds more Austin real estate as IBM assumes its Domain lease --

By: Cody Baird – Staff Writer, Austin Business Journal | Sep 5, 2024

Facebook parent company Meta Platforms Inc. is shedding another big chunk of Austin office space, but IBM Corp. is stepping in to fill the gap.

IBM is assuming the lease on the entire 320,000-square-foot building in The Domain in North Austin that Meta is vacating.

Cousins Properties, which owns the Domain 12 office building, announced Sept. 5 that an unnamed Fortune 100 tech company will assume Meta's lease on Jan. 1, 2026, and an IBM spokesperson later confirmed that Big Blue is the new tenant.

IBM is already active in The Domain area and was set to lease space in an upcoming tower from real estate developer Hines at its northern tip, but that lease agreement has now been terminated.

“Hines and IBM have terminated the lease agreement for IBM to serve as a key tenant at OneTerra, a new office project at the Domain in Austin," IBM said in a statement.

"Hines and IBM maintain a strong, positive relationship and look forward to continuing our work on other strategic partnerships, both now and in the future," the statement said. "Hines is actively engaged in conversations with other potential tenants. Austin is an extraordinary — and growing — center of talent innovation, and IBM remains committed to investing in new experiences for our clients and employees in this market. We expect to move Austin-based IBMers into new, modern offices in 2026. This Austin, Texas, facility investment will establish an even stronger ecosystem for IBM, its clients and partners, building on our more than 55-year tenure here.”

Meta didn't respond to requests for comment, and Cousins declined to comment.

As IBM is securing new real estate in Austin, Meta is actively shedding its space.

IBM, one of Austin's original tech titans, has extended the maturity date of the Domain 12 lease from 2031 to 2040. IBM's now-terminated lease in Hines' upcoming project was set to be 320,000 square feet, the same size as its new lease at Domain 12.

Additionally, IBM signed a 50,000-square-foot lease for lab space at Karlin Real Estate's Parmer Impact Labs earlier this year.

Meanwhile, Meta has spent the past two years attempting to shed its huge office leases in Austin.

The tech titan announced in November 2022 that it would not move into the then-under-construction Sixth and Guadalupe office tower downtown, despite leasing 586,000 square feet in it. The tower is now complete and the office space remains empty.

Additionally, Meta announced in June 2023 it would seek a subtenant for a 120,000-square-foot lease it has in the 300 West Sixth office tower.

Meta still leases 320,000 square feet in downtown’s Third + Shoal office tower.

Meta lists 120 open positions in the Austin area on its website. It is the the 19th-largest tech employer and 29th-largest overall private employer in the Austin area with 1,500 employees, according to ABJ research.

IBM, meanwhile is the ninth-largest tech employer and fifth-largest overall employer in the region, with 6,000 employees.

So the development deal for the shiny new office space that Arvind was bragging about fell though - and instead they're taking over this much smaller space.

Makes perfect sense - especially when you claim Austin as a "strategic site" and force your people to pick up and move across the country to coffee badge.

What a dumpster fire.

Arvind and his chipmunks are id--ts.

I think IBM is not giving Austin accurate headcount’s, or IBM is planning for only 1/3-1/2 of the employee population to show up on any given day

August 2024 Chamber of Commerce statement

“While the company does not break out local workforce figures, recent estimates from the Austin Chamber of Commerce put IBM's Austin workforce around 6,000 local employees.”

How did you come up with the 187k reduction in space? Is the reduction from their current legacy space, or their future proposed space? Reason I ask is the articles you referenced say IBM just swapped 320k of space from one location (Hines property (IBM was going to take 320k of space from 500k available)) to 320k of space in domain 12

Either way it certainly looks like IBM has substantially reduced their footprint vs the past 10 year