If your office feels emptier than it used to — or if your monthly rent is starting to feel unjustifiable — it might be time to think about downsizing. Whether you're responding to hybrid working patterns, cost pressures, or a change in team size, office downsizing can be a strategic move that benefits both your business and your team.
Let’s walk through what downsizing actually means, how to do it effectively, and what to avoid.
What does downsizing an office actually mean?
Downsizing an office simply means moving to a smaller workspace — either within your current building or to a new location altogether. It can also involve reconfiguring your existing space to make it more efficient, or subletting unused areas to other businesses.
It doesn’t have to signal bad news. Many growing companies downsize their footprint while upgrading the quality of their workspace. With hybrid and flexible working the norm, the average team doesn’t need as much fixed space as it used to.
The key is to make sure the space you do have is working hard for your team — without wasting budget on square footage that sits empty.
How do you know it's time to downsize?
A few signs it might be the right move:
- Desks are sitting empty most days: If your team is hybrid, remote-first, or you work with freelancers, you probably don’t need a full bank of permanent desks.
- You’re scaling down, pivoting, or restructuring: If your team size has changed, your space should reflect that.
- You’re focused on cashflow: Office rent is one of the biggest line items in many budgets. Trimming it down can free up resources for more impactful areas — like hiring, product development, or employee wellbeing.
- You want to reinvest in better quality space: Many companies choose to downsize in square footage but upgrade their overall workspace experience. That could mean better design, more natural light, or stronger amenities.
If you’re seeing any of these patterns — or just have a hunch your current setup isn’t quite right — it’s worth exploring what a smaller footprint could offer.
Read more: How Much Office Space Do I Need?
How to downsize your office space
Downsizing your office space takes more than just picking a smaller floorplan — it’s about making smart decisions that align with how your team actually works. Here’s how to approach it step by step, without disrupting your operations or morale.
1. Audit your current space
Start by looking at how your existing space is actually being used. Track desk occupancy across the week, monitor how often meeting rooms and phone booths are booked, and observe whether your breakout or social areas are being used effectively. Beyond the numbers, talk to your team. Ask them what parts of the office they find most useful, and which areas go untouched. This will give you a clear picture of what’s working — and what isn’t — so you can make more informed decisions about what your next space really needs.
2. Communicate early and honestly
Downsizing isn’t just a logistics decision — it’s a people one. Let your team know early that you're exploring a smaller office, and be upfront about why. Whether it’s to reinvest in better facilities or reduce unnecessary spend, people appreciate being kept in the loop. Share rough timelines and be open to feedback. When teams understand the bigger picture — especially if it means more budget for training, wellbeing, or perks — they’re far more likely to support the change.
3. Get clear on your lease terms
Your approach to downsizing will depend on the kind of office contract you’re in.
If you’re based in a serviced office, it’s worth asking your provider whether they can put your current space back on the market. If they secure a replacement tenant, you may be able to exit early and move into a smaller office within the same building or network. You can also ask about reducing your office size in exchange for extending your contract — many operators are open to this if it maintains their overall contract value.
If you’re in a traditional lease, check the terms of your agreement. Look for any upcoming break clauses or required notice periods. You might also have the option to sublet or underlet part of your space, which can help reduce costs without needing to move. Either way, start the conversation with your landlord early. You may have more negotiating power than you think — especially if you’re a good tenant.
4. Right-size your space
Once you’ve audited your current setup and reviewed your lease, you’ll have a better idea of what your next office should look like. This might mean reducing your number of desks and introducing hot-desking instead of fixed seating. You could downsize to just one or two flexible meeting rooms, instead of maintaining five barely used ones. Breakout areas can serve double duty for casual collaboration and downtime, and natural light, fresh air, and solid amenities can help your team feel energised — even in a smaller space.
Downsizing often gives you the freedom to focus on quality over quantity. Many businesses choose to increase their spend per square foot, creating a better experience for their team while still reducing overall costs.
5. Think flexibly
Moving to a smaller space doesn’t mean sacrificing collaboration or team culture. You can still access overflow meeting rooms and desks when you need them — Tally On Demand makes this easy to arrange for away days, team offsites or big client meetings. For distributed teams, coworking memberships in different locations can keep everyone connected. And if you’re embracing hot-desking, a desk booking system (like the one built into Tally Workspace) can help manage who’s in and when.
You don’t always need to move to downsize. Some businesses choose to share their existing space with another company — even just part-time for one or two days a week. It’s a creative way to cut costs and build new connections. If this sounds interesting, chat to us — we can help you find the right setup.
What not to do when downsizing your office space
Here’s where some companies get it wrong:
- Don’t wait until the last minute: Lease negotiations and team consultations take time. The earlier you start, the smoother the transition.
- Don’t choose space based on assumptions: Just because your team has always had a certain setup doesn’t mean they still need it. Use data — and honest conversations — to guide your decision.
- Don’t ignore location flexibility: You might find better value by expanding your search radius. Areas just outside Zone 1 or in up-and-coming neighbourhoods can offer stunning spaces for less.
- Don’t overlook your existing provider's flexibility: If you're in a serviced office, speak to your operator. They might be able to re-market your space, let you switch to a smaller one mid-contract, or offer flexible terms in exchange for a longer commitment.
- Don’t downsize without a plan for overflow: Moving to a smaller office can work brilliantly — but only if you’ve planned for team offsites, company all-hands, or busier in-office days. Platforms like Tally On Demand make it easy to book extra meeting rooms or hot desks as needed.
- Don’t skip the space usage audit: Guesswork leads to mismatches. Track desk and meeting room usage, talk to your team, and really understand how your current space is working before committing to something smaller.
- Don’t make it a top-down decision: Downsizing affects everyone, so involve your team in the process. Their feedback can help you avoid costly mistakes — and boost morale in the process.
- Don’t treat it as a temporary fix if it's part of a long-term strategy: If you're embracing hybrid working for good, invest in a space and setup that reflects that — rather than treating it as a short-term cost-saving measure. The right space can still support connection, collaboration, and culture.
- Don’t forget about team experience: A smaller office isn’t an excuse to cut corners. Prioritise comfort, collaboration, and access to great amenities. People notice when you care about their environment.
The upside of downsizing
Here’s what businesses often discover when they right-size their office:
- Stronger team culture: Smaller, better-used spaces create more intentional interactions.
- Increased flexibility: Teams can grow or pivot faster without long-term space commitments.
- Cost savings: Reducing rent frees up capital for growth, wellbeing, and innovation.
- Better spaces: Rather than filling a big space with rows of desks, you can design something human-centric, stylish, and aligned with how your team works now.
What if you don’t want to move?
Downsizing doesn’t have to mean relocating. If you like your current building or want to avoid the hassle of a move, there are still practical options to reduce your footprint.
You could sublet part of your space, if your lease allows it — a straightforward way to offset costs without changing addresses. Another growing trend is office-sharing, where you split the space with another company on different days of the week. It’s especially useful if both teams work on hybrid schedules.
A fresh layout can also go a long way. Redesigning your existing space — whether that’s moving walls, updating furniture, or rethinking zones — can make it feel brand new and better aligned with your current needs. Or, if you’re after more flexibility, consider switching to a managed office solution. This setup offers support and adaptability without locking you into a long-term lease.
Downsizing your office without the drama
Downsizing your office doesn’t have to be a step back. With the right approach, it can be an upgrade — for your team, your finances, and your future growth.
If you’re not sure where to start, or need help exploring your options, Tally Workspace is here to help. We’ll guide you through the process, help you find the perfect space (or downsize your current one), and give you the tools you need to make flexible working actually work.
