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IBM to reduce office space by nearly half in India

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IBM is planning to reduce its office space in India by half, as the work-from-home model gains popularity after the COVID-19 outbreak.

American IT giant IBM is planning to reduce its office space in India by half, as the work-from-home model gains popularity after the COVID-19 outbreak. The company plans to discontinue lease agreements at half of its offices in India, according to a report by The Economic Times.

IBM has more than 10 million square feet of rented office space across major cities such as Bengaluru, Hyderabad, Noida, Gurugram, and Kolkata. And IBM has more than 100,000 people in India and also has temporary workers through staffing firms.

IBM declined to comment when contacted by ET. A senior executive at the company, however, said it would take a “relook” at many lease agreements that are up for renewal, although it would not impact half of such contracts.

“Maybe 25 percent of people need to come to the office regularly. For others, it will be flexible, and their workspace will also be the same,” reported by ET.

According to some analysts, IBM’s plan to reduce leased office space is an effort to cut costs.

“There is a lot of pressure in terms of top line and bottom line for all IT Services companies, so at some stage, the need to reduce costs is critical. All companies are focusing on automation and there are a large number of employees working from home now,” Sanchit Vir Gogia, chief executive of Greyhound Research, told the paper.

Most employees at IT offices in India have been working from home since the lockdown began on March 25.

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