Does Google's pull-back from signing a lease on another new office building in Dublin mean it's quietly scaling back its Irish ambitions? Does it reflect a wider tech industry re-evaluation of Irish operations? The answer to both questions is almost certainly no. Here's why.
1. Office space isn't the indicator it was a year ago
Remember the pandemic? The big tech companies have led pledges to allow people to work from home (or "flexibly" in Google's case) for the foreseeable future. That means there isn't the same importance in securing new office space as there seemed to be in 2019. Because of its own growth, Google was desperate to get more office space in Dublin. But that urgency has gone. This is especially so given that the cost of office leases are still close to pre-Covid levels. Why would a forward-looking company sign a 20-year lease at a high price in the middle of a pandemic?
Besides, Dublin is hardly alone in seeing a fall in demand for office space. The biggest story in San Francisco right now is people leaving the city - and expensive offices - while still working for the same big, booming tech companies. The size of your office footprint, for the moment, isn't quite the barometer of intent that it was a year ago.
2. Google, like other tech companies, needs its Dublin base to make money
Google's core business hasn't suffered during the pandemic. If anything, its services are being leaned on more now: there's been an acceleration of a switch to digital working and online platforms. Like Microsoft, Facebook and others with major bases in Dublin, the company still needs people to maintain this business and improve it. Dublin has never been regarded as a low-lying weak link: its sales and engineering functions, in particular, are crucial to Google's bottom line.
"Anyone who says Google is going to pull out of Ireland doesn't know how tech FDI [foreign direct investment] works," said former senior Google executive and former head of Twitter Ireland Stephen McIntyre. "They won't pull out, not because of loyalty to Ireland, but because it's bad for business. A country that depends on tech FDI shouldn't get distracted by office space and what that implies for future job numbers. Lower value jobs will eventually disappear anyway, quietly, with no sudden 'pull out'. If not due to Covid, then [it will be] due to automation. That should be old news," he Tweeted.
3. Google itself is strongly implying that the office lease doesn't reflect any downgrading of its Dublin plans
"We are committed to Ireland and continue to invest in our Irish operations," the Irish office said about the matter this week. "After much deliberation, Google has decided not to proceed with leasing the Sorting Office."
Yes, you'll say, but they would say that, wouldn't they? They would. But executives seem genuinely amused by the idea that walking away from a pricey office lease when 'flexible working' is in the ascendancy represents anything other than what it is on paper.
4. But if office space doesn't matter, why bother having a hub in Dublin at all?
Mainly because most tech companies are still big believers in physical offices, despite their being ahead of the curve in offering home working. Sundar Pichai, Google's CEO, certainly falls into this category. Netflix Reed Hastings has also spoken out on this issue. Their logic is that there are very few companies that manage to be productive and innovative at scale with an all-remote workforce. (Zoom is one such firm, but you could argue that other global health factors have intervened to give it a boost.)
Besides, Google has two new office properties set to come on stream soon. It has invested a fortune in its buildings. It has done so for good reason. Despite all of the talk of 'work from home', there are thousands of ambitious young workers who genuinely want to work in a communal Google CEO Sundar Pichai office environment. They don't have their three-bed semi-detached homes with gardens and home offices. They haven't yet met their life partner. They want to be around the buzz of other people, not the quiet of a bungalow 40km away. They also want to learn from other people and get promotions quickly.