Pinterest nixes big San Francisco lease deal in Covid scaleback

[SAN FRANCISCO] Pinterest cancelled a large office lease at a building to be constructed near its San Francisco headquarters, marking one of the most significant moves yet by a big tech company to scale back real estate plans in the city amid the Covid-19 pandemic.

"As we analyse how our workplace will change in a post-Covid world, we are specifically rethinking where future employees could be based," Todd Morgenfeld, Pinterest's chief financial officer and head of business operations, said in a statement on Friday.

The social-sharing service is paying a US$89.5 million termination fee to terminate its lease for 490,000 square feet of space. It will keep its existing offices in the city.

Pinterest signed the lease last year with Alexandria Real Estate Equities. A spokesperson for the real estate investment trust didn't immediately return a call seeking comment.

San Francisco, with its expensive real estate and reliance on the technology industry, stands to be reshaped by the pandemic. Tech offices have been shut down along with much of the rest of the state of California over the past six months, and companies including Twitter and Slack Technologies have embraced remote work for the long term. Some workers have migrated away from the city.

Mr Morgenfeld said a more distributed workforce "will give us the opportunity to hire people from a wider range of backgrounds and experiences."

BLOOMBERG