(Bloomberg) -- Pinterest Inc. canceled 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 analyze 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 Friday.
The social-sharing service is paying an $89.5 million termination fee to terminate its lease for 490,000 square feet (45,500 square meters) of space. It will keep its existing offices in the city.
Pinterest signed the lease last year with Alexandria Real Estate Equities Inc. 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 Inc. and Slack Technologies Inc. have embraced remote work for the long term. Some workers have migrated away from the city.
See also: Tech's Embrace of Remote Work Sends San Francisco Rents Plunging
Morgenfeld said a more distributed workforce “will give us the opportunity to hire people from a wider range of backgrounds and experiences.”
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