Spotlight: Impact of AI on European offices

The report titled "Spotlight: Impact of AI on European offices" is published by Savills, a leading global real estate services provider. The authors, Mike Barnes, Christina Sigliano, and Andrew Barnes, are experts in the fields of European research, global occupier services, and commercial leasing, respectively. This publication examines the implications of artificial intelligence (AI) on office-based employment in Europe, highlighting both immediate and long-term effects.

AI is anticipated to lead to job displacement in the short to medium term while supporting office-based employment over the longer term. As companies increasingly adopt AI technologies, the demand for specific skills will shift towards utilizing AI tools, allowing employees to focus more on interactive and creative roles. Historical parallels are drawn to the dotcom boom, where initial job reductions were followed by significant employment growth as workers reskilled to meet new demands.

Big tech companies are investing approximately $750 billion in AI infrastructure, including servers and data centers, during 2025 and 2026. This influx of funding is expected to influence European AI and machine learning companies positively, with €16 billion in venture capital invested in the first three quarters of 2025. The report notes that sectors like defense, drug discovery, and financial services are particularly benefiting from this investment.

Despite concerns regarding job displacement, data from Eurostat and Oxford Economics suggests a positive correlation between AI adoption and job growth in office sectors since 2020. However, there is a noted decline in entry-level job vacancies, indicating a trend toward hiring more experienced workers. Around 60% of U.S. workers believe AI will change their job roles within five years, highlighting the need for ongoing skills development.

Long-term projections indicate that AI could either boost productivity by 10% or lead to job displacement through the automation of routine tasks. The office sector is expected to grow by 0.4% annually over the next decade, with new jobs emerging in AI engineering and data science. However, sectors like finance may face greater challenges due to their susceptibility to automation.

AI's rise will necessitate changes in office design, particularly concerning energy requirements and digital connectivity. Offices will increasingly need to facilitate collaborative work and interactions, with a growing demand for varied workspaces such as breakout areas and private meeting rooms. The report indicates that data centers are being prioritized, leading to a shift where landlords may require tenants to relocate communication rooms off-site to enhance energy efficiency.

The Savills European Occupier AI Resilience index ranks cities based on their ability to adapt to AI's growth. London, Berlin, Munich, Paris, Dublin, and Stockholm emerge as the top contenders, benefiting from strong talent pools, favorable business environments, and significant venture capital investment. For instance, London has raised €26.5 billion in AI/ML venture capital, supporting its dominance in the tech ecosystem.

Overall, the impact of AI poses both risks and opportunities for office-based jobs and workspace demand. While AI is expected to displace certain roles, the overall trend suggests that job augmentation will be more common than outright automation. Companies are encouraged to invest in upskilling their workforce to adapt to new technological demands, ensuring a sustainable transition in the evolving job landscape.