Microsoft shelves plans for new London office complex

But the company is 'committed to the UK'

Microsoft has abandoned plans to establish a new 500,000 sq ft office complex in London, months after announcing it would lay off 10,000 staff worldwide.

According to property website React News, the American tech giant had been on the lookout for a location in London as a replacement for its current office leases in Reading, due to expire in 2026.

However, Microsoft seems to have postponed any plans for a new office complex for the time being, in light of the current economic conditions.

"We are committed to the UK and have facilities across the country," a spokesperson for Microsoft told The Register.

"We regularly review our portfolio to make sure it meets the needs of our people and our long-term business."

Microsoft established its Thames Valley Park headquarters in the 1980s in the busy M4 corridor, along with many other tech businesses. The lease was renewed in 2010, when approximately 2,000 employees were working at the site.

The company does already have offices in London - at Paddington, Victoria, and an 'Experience Centre' in Regent Street - but could have been looking to consolidate those locations. It hinted at something similar earlier this year.

Real estate demand for offices has come under strain recently, due to widespread tech industry job cuts and the popularity of remote work.

Microsoft's own hybrid work policy anticipates that half of its employees will come into the office for 50% of their working time, although there is flexibility around this arrangement.

In January Microsoft announced a broader tech pullback that included laying off 10,000 employees, or 5% of its workforce.

In addition to the layoffs, the company said it was taking steps to reduce overheads by consolidating leases and creating higher density workspaces, as well as making changes to its hardware portfolio.

As of June last year Microsoft employed 221,000 full-time workers, including 122,000 in the US and 99,000 abroad, according to filings.

After experiencing several quarters of PC market decline, which affected Windows and device sales, Microsoft has been under pressure to sustain the growth rates of its Azure platform.

The company, worth about $2.1 trillion, warned in October of a downturn in its cloud computing business, acknowledging that some of its key corporate clients were rethinking their investment in reaction to economic challenges.

"In a world facing increasing headwinds, digital technology is the ultimate tailwind," CEO Satya Nadella said at that time.

"In this environment, we're focused on helping our customers do more with less, while investing in secular growth areas and managing our cost structure in a disciplined way."

In December, Microsoft acquired a £1.5 billion stake in the company that owns the London Stock Exchange, as part of a long-term cloud computing collaboration. Over the course of the alliance, the Microsoft anticipates earning $5 billion in revenue.