In a bold move reflecting the changing landscape of professional life, Ernst & Young (EY), one of the Big Four accounting firms, is reportedly in talks to abandon its long-standing London headquarters.
The iconic 10-storey tower block, situated in the More London office complex near London Bridge, has served as the nerve centre for EY’s UK and Ireland operations since 2003, housing approximately 9,000 employees, including its global executive team.
The potential departure comes amidst a broader trend of companies reevaluating their office spaces as the work-from-home paradigm continues to reshape the traditional office environment.
EY, like many organisations, adopted a hybrid work policy in 2021, allowing employees greater flexibility, with the expectation that most individuals would spend at least two days a week working remotely.
The current review of the More London office is prompted by EY’s forward-looking assessment as its 25-year lease on the building approaches its expiration in 2028.
Occupancy data indicates that the office experiences its highest footfall between Tuesday and Thursday, reaching 88 percent during peak times. However, the review is still in its early stages, and no final decision has been reached.
A strategic shift
Despite EY’s significant growth, nearly tripling in size since occupying the building, the firm is considering a strategic shift. The recent announcement of cost-cutting measures and layoffs further underscores the challenging economic climate, with a decline in demand for advisory services.
This potential move follows EY’s recent setback, as the firm abandoned a $600 million break-up plan earlier in the year. The decision places EY among a growing list of major London employers, including HSBC and Clifford Chance, reconsidering the necessity of a traditional tower block office space.
The broader trend is evident in Canary Wharf, where several high-profile exits, including HSBC’s departure from the “Tower of Doom” and Clifford Chance’s relocation to The City of London, have raised questions about the future of office spaces in the district. Economic uncertainty and a shift towards remote work have led to a decline in demand for office space, resulting in a 10 percent vacancy rate in central London.
Landlords are adapting to the changing commercial landscape
Landlords in London are adapting to the changing landscape by offering extended rent-free periods and free office fit-outs to attract tenants. According to property consultancy Carter Jonas, companies signing long-term office leases are now being offered an average of a year and a half rent-free period, compared to five months before 2019.
Canary Wharf, in particular, is experiencing the highest average rent-free period among prime central London office hubs, with some leases offering up to three years of rent-free occupancy. The district currently faces a vacancy rate of 14.8 percent.
EY’s More London office, part of the Foster and Partners-designed complex, has been a key player in the regeneration of Southwark’s docklands since its establishment in 2003. The move, if finalised, would mark a significant shift in EY’s presence in the heart of London.
In response to inquiries, an EY spokesperson stated, “As a growing business with over 20 offices across the UK, we continually review our real estate footprint. We do not comment on speculation.” Canary Wharf declined to provide a comment on the matter.
Kate Palmer, HR Advice and Consultancy Director at Peninsula
“This recent announcement is no shock as EY follow other notable businesses opting to move out of their London headquarters, including HSBC.
“As the economy took a dramatic decline and businesses look to cut back on costs. Moving their teams to a remote working pattern is a way to significantly reduce overheads, with the money saved from renting expensive city centre buildings then able to be reinvested in other areas of the business.
“And with many employees prioritising the remote and hybrid working patterns that were first implemented during the pandemic, a move like this can be seen by some businesses as a way to aid retention while giving employees the flexibility that they are looking for.
“But as more corporations move out of city centre premises, it has a knock-on effect on the smaller independent businesses who rely on their trade, such as cafes, restaurants and shops, many of whom are already struggling to survive.
“Any change to working patterns will require employee approval as it is a change to terms. Place of work is a contractual provision and not everyone wants to work remotely, so there may be some resistance from employees. The employer would need to look at their contracts to determine their approach to make sure they manage this process correctly.”
Amelia Brand is the Editor for HRreview, and host of the HR in Review podcast series. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, and wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at the University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.