• Thu. Apr 25th, 2024

Telecom Giant AT&T CEO Prepares To Slash Real Estate Portfolio

Bynewsmagzines

May 17, 2023
AT&T's campus in downtown Dallas has been revamped in recent years as AT&T Discovery District. (Richard Eimer for Gensler)

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Telecommunications giant AT&T‘s CEO John Stankey unveiled plans for the company to cut back on its physical real estate and said he has given an ultimatum to certain managers: Return to the office or quit.

Stankey, in an interview on Bloomberg Radio, said AT&T is consolidating in nine core locations in key hub markets, including its Dallas headquarters at AT&T Discovery District and in Atlanta. Other offices considered to be a core location by AT&T include Los Angeles; Middletown and Bedminister, New Jersey; San Ramon, California; Seattle; and Washington, D.C.

AT&T’s decision to exit some of its office space comes as sublease space reaches all-time-highs throughout the United States. According to CoStar data, AT&T leases more than 75 million square feet in roughly 12,000 locations throughout the world. About 61% of its real estate is office space.

The company which ranks No. 13 on the U.S. Fortune 500 list, is also requiring its managers in Dallas and Atlanta to make appearances in the office at least three days a week beginning in July, with the remainder of managers in other offices mandated to make these appearances by Sept. 4, which Stankey said could prompt some employees to leave the company.

The return-to-office mandate affects more than 60,000 managers at the company. About 85% of those managers live near one of the nine core offices, while the other 15% of the managers will have a decision to make: They can relocate, or they can quit.

“If they want to be a part of building a great culture and environment they’ll come along on these adjustments and changes,” Stankey said, during the interview, in which he mentions AT&T’s relocation package. “Others may decide, given the station of life they are in, that they want to move in a different direction.”

AT&T joins other companies across the country in implementing return-to-office mandates. Last year, there was also a big post-Labor Day push by companies wanting to have employees back in the office, collaborating and working together once again after the pandemic upended workplaces. In the past year, tech firms have increasingly required employees return to the office, even if they embrace some form of flexibility.

The details of what offices will be cut from AT&T’s real estate portfolio were not immediately disclosed and the company did not immediately respond to an interview request from CoStar News.

AT&T spent $100 million upgrading its four-block Dallas headquarters in recent years. The telecom giant opened its revamped plaza and headquarters during the pandemic. The upgrades for AT&T Discovery District links multiple buildings throughout AT&T’s headquarters to give corporate employees and visitors the ability to congregate in a public plaza facing a 104-foot digital display.

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