This Insurance Giant Has Cut Its Office Budget By $244 Million in 4 Years — Here’s Where Employees Will Meet Instead

By temporary On Nov 20, 2024 5 0

Allstate cut annual spending on corporate offices by more than half in four years, going from $382 million in 2020 to $138 million this year, per Bloomberg — a $244 million reduction.

Though Allstate has also reduced its real estate footprint from 12 million square feet to 4 million, the insurance giant says it’s metaphorically “building something new” in the near future by allowing remote employees to meet in coworking spaces or shared offices used by multiple companies simultaneously.

According to a Monday Bloomberg report, 25% of Allstate’s 54,000 corporate employees will have the chance to meet with one another in coworking spaces across the country. They will rent space in cities like Atlanta, Indianapolis and Minneapolis through LiquidSpace by the day. T-Mobile and Philips also use the platform.

^{Allstate corporate office in Northbrook, Illinois. Photo by Scott Olson/Getty Images}

The coworking plan is currently in the “testing and learning” stage, Allstate’s vice president of administration and real estate Mike Thomas told Bloomberg. It’s happening in cities where Allstate has between 100 and 1,000 employees — not enough for an office lease, but enough for an in-person gathering once in a while in a coworking space for training and team-building.

Allstate’s test-and-see approach differs from the strict return-to-office policies taken recently by companies like Amazon and Dell.

At Dell, working remotely means not being considered for promotions or new roles within the company. A leaked memo in May showed that Dell had begun monitoring attendance and using it as a factor to determine how employees were reviewed, rewarded and compensated.

At Amazon, all corporate employees will be required to work in the office five days a week starting January 2. Amazon CEO Andy Jassy stated in September that in-person work was better for strengthening company culture; Amazon Web Services CEO Matt Garman said in mid-October that there were other places employees could work if they didn’t like the mandate.

Meanwhile, the benefits of in-person work over hybrid work remain in question. A study published in Nature earlier this year found that employees on a hybrid schedule were equally productive as those on an in-person schedule. A hybrid schedule presented a measurable advantage: It led to a one-third reduction in quit rates and higher job satisfaction rates.