Savills: AI has not slowed down Europe’s office employment so far – economy remains a key driver

Despite growing concerns about the impact of artificial intelligence on traditional office jobs, there is no evidence of a nationwide decline in office employment in Europe due to the new technology. This is the result of a recent analysis by the international real estate service provider Savills, which examines European labour market, economic and AI adoption data.

Rather, the study shows that economic growth continues to be the significantly stronger driver of the development of office employment than the introduction of AI technologies. While the correlation between AI adoption and employment development is comparatively weak, there is a strong correlation between economic dynamism and the growth of office-based countries with high AI use, such as the Nordic markets or the Benelux countries, which in some cases record lower employment growth.

Current labour market data also support this assessment: According to Savills, the rate of job vacancies in the professional services sector in the EU remains at the level of the pre-pandemic average at 2.4%. So far, this has argued against a broad-based decline in employment demand in traditional office sectors.

However, according to Savills, this is primarily due to near-total employment, demographics, and already high income levels – not structural AI-related job cuts.

At the same time, many of the leading AI companies are currently expanding into European office markets. Databricks recently leased around 13,000 square meters of office space in Amsterdam, OpenAI is planning its first permanent office in London, and Anthropic is expanding its presence in Paris and Munich. JetBrains is also one of the most active tech users of high-quality office space in Germany: The company has leased around 20,000 square meters of high-quality office developments in Munich and Berlin.

“The current discussion about AI often focuses too much on potential job losses. In fact, we are currently seeing the opposite: companies with high AI investments are among the most active growth and space buyers in many places. AI does not change the existence of the office in the short term, but rather the requirements for quality, location and infrastructure of modern working environments,” says Jan-Niklas Rotberg, Head of Office Agency Germany at Savills.

Savills therefore does not expect AI to weaken the structure of European office space demand in the short term. Instead, the qualitative polarisation of the market is likely to accelerate further: modern, ESG-compliant and well-connected space in core urban locations remains in demand.

According to Savills, economic development remains the decisive variable for the development of office employment in Europe in the short term. In particular, the weak economic momentum in Germany and France is currently weighing more heavily on the willingness of many companies to hire than technological disruption.

In the medium to long term, Savills expects employees and companies to increasingly adapt to new technologies and build up additional skills. Oxford Economics therefore continues to forecast growth in office-based employment in Europe of around four percent within the next ten years – and thus additional demand for high-quality office space.