As Americans Work From Home, Europeans and Asians Head Back to the Office
Return-to-office rates in Paris and Tokyo have climbed to over 75%, while U.S. often sits around half
Return-to-office rates in Paris and Tokyo have climbed to over 75%, while U.S. often sits around half
While U.S. offices are half empty three years into the Covid-19 pandemic, workplaces in Europe and Asia are bustling again.
Americans have embraced remote work and turned their backs on offices with greater regularity than their counterparts overseas. U.S. office occupancy stands at 40% to 60% of prepandemic levels, varying within that range by month and by city. That compares with a 70%-to-90% rate in Europe and the Middle East, according to JLL, a property-services firm that manages 4.6 billion square feet of real estate globally.

Return to office was even more common in Asia, JLL said, where rates ranged from 80% to 110%—meaning that in some cities more people are in the office nowadays than before the pandemic.
Bigger homes, longer commutes and a tighter labor market help explain why Americans spend less time in the office than Europeans and Asians, workplace consultants say.
This divergence in return-to-office habits not only benefits overseas landlords more than their U.S. peers. It has a direct impact on how quickly metro areas rebound from the pandemic’s economic shock. Cities in Europe and Asia have bounced back relatively well. But empty office buildings and missing commuters have undermined recoveries in U.S. cities such as New York and San Francisco, where local restaurants, shops and other businesses that rely on office workers as their primary customers have suffered.
The number of unemployed in New York City increased by 83,500 between early 2020 and the third quarter of 2022 as the city’s unemployment rate surged far above the national average, according to a report by the New School Center for New York City Affairs. Many of those who lost their jobs worked in Manhattan in face-to-face industries such as retail, accommodation and food services.
While Manhattan has been particularly hard hit because of its dependence on office commuters, other U.S. central business districts are also struggling. Falling office values are threatening to hit city budgets that depend on property taxes. Lower transit ridership is weighing on the finances of public-transportation authorities. Adding more apartments can help revitalise central business districts, but that will take time.
Several overseas capitals experienced periods where more than 75% of their workers were back at their desks in 2021 and 2022, JLL said. That includes Tokyo, Seoul and Singapore in Asia. Paris regularly topped the list of workers back in the office in Europe. Stockholm wasn’t far behind with several months at a more-than-75% return-to-office rate.
No major U.S. city tracked by JLL achieved that high a return rate during the period.
“The U.S. has borne the brunt of this,” said Phil Ryan, director of city futures at JLL.
Living arrangements are one reason for the difference in work habits. Americans are more likely to live in spacious suburban houses. That makes it easier to set up a home office away from distractions. Hong Kong’s small apartments, for example, often house multiple generations, making working from home less appealing.
Suburban sprawl means many Americans have longer, more tedious commutes plagued by worsening traffic jams—another reason to stay home. While a number of European cities also have long average commutes, New York and Chicago are unmatched, according to mobility-services company Moovit Inc. Public-transit systems in Europe and Asia are often more reliable and less prone to delays, making it easier to get to work.

“We have high-density cities with effective public-transport systems,” said Caroline Pontifex, London-based director of workplace experience at consulting firm KKS Savills. “That makes a difference.”
Another explanation for America’s office exceptionalism is its labor market. At 3.4%, the U.S. unemployment rate is barely more than half the European Union’s unemployment rate of 6.1%. While Europe is also facing labor shortages, U.S. companies have been particularly hard hit, said JLL’s Mr. Ryan.
That has forced them to look farther afield for employees and hire remotely. Tech firms, which account for a particularly high share of employment in some big U.S. cities, have long been more tolerant of remote work.
Co-working companies are also reporting lower occupancy in some U.S. cities. WeWork Inc. said 72% of its desks in New York were leased as of the fourth quarter of 2022, compared with 80% in Paris, 81% in London and 82% in Singapore.
Workplace consultants say they expect the office-use gap between the U.S. and the rest of the world to persist.
It doesn’t help that U.S. offices were emptier long before the pandemic. A construction glut led to high vacancy rates, and even within leased offices companies tended to put fewer people on each floor than their European and Asian peers.
All that empty space is now creating a negative reinforcing cycle, said Phil Kirschner, an associate partner at business consulting company McKinsey & Co. Americans sitting in big, mostly empty offices find the experience depressing, making them more likely to stay at home in the first place. “It feels less energetic,” he said.
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Surging demand from AI data centres has driven flash memory prices up fivefold over the past year, giving suppliers such as Kioxia greater leverage over Apple. The shift is increasing storage costs for the iPhone maker, putting pressure on profit margins and contributing to higher prices across its product lineup.
During a ride in a Southern California desert, sales executive Scott Nelson stopped his dirt bike, pulled out a rifle and shot his old iPod.
Nelson sold flash storage to Apple AAPL -0.94%decrease; down pointing triangle and hated feeling like he always got the worst end of the deal. His Japan-based manufacturer, Kioxia, had little leverage. Apple was the world’s biggest buyer of flash—the chips in iPhones that store photos, music and apps—and used its position to squeeze every cent from suppliers. Apple bullied flash makers into opening their books so it could monitor sales, making sure no one else got a better deal.
Kioxia and other flash makers stewed as Apple paid them pennies for flash storage that the iPhone maker resold to customers for dollars. The disparity in bargaining power had galled Nelson, who used Android phones in protest.
Nelson kept the broken pieces of his iPod, the first Apple device to use flash. They sit on his desk and hold a special reverence now that the tables have turned.
In the past year, demand by AI hyperscalers has quintupled prices for flash, according to research firm TechInsights, opening a new era for Kioxia and other suppliers. Two years ago, Apple bought nearly twice the flash storage of Microsoft, Amazon, Meta and Google combined, according to TechInsights estimates. Hyperscalers are now buying double Apple’s share.
Flash memory suppliers and their sales teams privately expressed their glee at Apple’s comeuppance during chitchat at the industry’s largest conference this summer in Santa Clara, Calif. AI deals have given Kioxia sales executives and other flash suppliers new leverage to charge Apple higher prices.
Meta, Microsoft and Amazon signed contracts with Kioxia this year to secure long-term supply by committing to higher prices. The contracts protect Kioxia’s profits if the market turns. The company declined to comment.
Hyperscalers can afford to pay more. Flash storage is a smaller part of building a data center than making an iPhone, and accounting rules allow companies to spread the cost over years.
Apple is expected to spend $25 billion on flash storage this year for about the same amount it bought for $6 billion in 2025, according to estimates by TechInsights. Tim Cook, Apple’s executive chairman, compared escalating memory chip prices to a “100-year flood.”
Yet Apple had ignored analysts’ warnings and was caught off guard, said people familiar with the company’s procurement practices.
Company executives believed they knew the market better than anyone else, the people said. Flash that cost $68 a gigabyte in 2005 had fallen to a nickel by 2023. Now, demand by the AI industry has lifted the price to more than 30 cents a gigabyte, a 550% jump, threatening Apple’s steep profit margins from selling extra storage.
Buyers of the iPhone 17 Pro paid Apple $200 last year for double the storage of its 256-gigabyte base model. The extra storage at the time cost Apple $15 and has since shot up to $66, according to an analysis by The Wall Street Journal.
“Apple has historically driven a very hard bargain with memory suppliers,” said Walt Coon, an analyst at TechInsights. “And there’s no shortage of satisfaction among suppliers now that the balance of power is shifting.”
“We’ve worked with many of our suppliers for decades, and we deeply value their partnership over the years,” Apple said in statement. “We look forward to continuing our important work together.”
Apple recorded an average gross profit of more than 80 cents for every dollar it charged iPhone and iPad buyers for extra storage since it first released those devices through 2025, the Journal found. For Mac computers sold since 2010, it averaged nearly 80 cents.
In recent months, Apple raised prices for nearly all of its products. Prices rose an average of 13% for iPhones, an increase that included older models which typically get a price cut.
The question for Apple is whether consumers will react to the higher prices by keeping their iPhones longer or whether they will continue to buy at their usual pace. For flash-storage makers, the question is when—or if—Apple will regain its flash-market leverage.
“It’s been a love-hate relationship between Apple and the flash industry,” said Mark Newman, an analyst with Bernstein Research. Apple has sustained the manufacturers for years, he said, but its power to cap prices, while beneficial to shareholders, left suppliers feeling “screwed.”
In 2001, engineers at Kioxia, then called Toshiba, showed two Apple executives a 1.8-inch-diameter, 5-gigabyte hard drive they had developed but didn’t yet know what to do with.
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