Atrium Health is considering trimming its office footprint across the Charlotte metro by 10% over the next year — a move that could save the hospital system $10 million.
Why it matters: With more than 40,000 local workers, Atrium Health is the largest employer in Charlotte. What Atrium does with its office leases could be a bellwether for what other big employers do as they look for ways to “right size” their office space.
- Employers all over Charlotte have seen how efficient remote work can be. A growing number are realizing one way to cut costs is to have less office space — and to have employees work from home at least part of the time post-pandemic.
Driving the news: Across the Charlotte metro, Atrium has more than 1 million square feet of office space. The hospital system is evaluating letting leases expire for about 100,000 square feet of space, said Bennett Thompson, Atrium’s VP of real estate.
Atrium’s primary mission is to provide health care services. But, Thompson said, being “as efficient and smart as we can with our general office portfolio” is also a high priority.
- Internal conversations at Atrium about reducing office space began before the pandemic, Thompson said. Those talks accelerated over the last year, as Atrium had about 9,000 employees working remotely.
- Atrium already left one of its local offices: A 20,000 square-foot building at 801 East Blvd.
What he’s saying: “We’d looked at trying to decrease the number of seats per teammate, or the number of workstations per teammate. Now, with Covid, we’ve realized that adding remote work capability as another lever in that really helps us out,” Thompson said.
“Within 12 months, we have some opportunities to get out of specific leases, and we’re evaluating those right now.”
Bottom line: The pandemic has weighed on Atrium’s financial health, and the hospital system has looked for ways to cut expenses without laying anyone off.
- In the future, Atrium will look to flexible, shared workspaces, and supplement those with remote work, Thompson said.
Other employers in town are similarly downsizing — or considering it.
Grant Thornton, for instance, is moving into a new space at Vantage South End later this year, CBJ reported. The firm’s new spot is 44% smaller than its current location Uptown, where it’s been for three decades.
The Charlotte Observer left its Uptown offices last August, citing the financial impact of the pandemic. Jeanne Segal, spokesperson for the paper’s parent company McClatchy, told CBJ the move prioritizes “jobs over cubicles.”
Wells Fargo, which employs about 27,500 people in Charlotte, is also examining its local real estate options. The San Francisco bank doesn’t expect to make any final decisions about its “future workplace strategy” until returning to a more normal operating environment, spokesperson Josh Dunn said.
“Like most companies, we are assessing lessons learned from the pandemic and have begun preparing our strategy for an eventual return to a more traditional operating model,” Dunn said.