SEATTLE — Since the pandemic, the optimistic take on the battered office market around Seattle has been pretty straightforward: vacancies will fade once employers get those remote workers back in.

But as vacancies persist despite widespread return-to-office mandates — more than a third of downtown Seattle offices are still empty — it's clear the market faces another barrier: one of its main drivers is running in reverse.

Since late 2022, hiring has slowed or even gone negative in many of the job categories, such as software programming, that helped fill Seattle area offices before COVID-19.

While overall employment in the Seattle area is up by a modest 0.5% since 2022, it's down by 9% in the “information” sector, which includes many programming jobs, and by 12% in jobs related to computer systems design, according to state data through July.

That’s a sharp reversal from the prior decade, when an escalating talent war among Microsoft, Amazon, Meta and other tech employers drove up Seattle-area employment in those two categories alone by 59% and 84%, respectively — or substantially more than hiring overall, which increased 29%.

The rest of the story is well-known: The tech hiring spree, coupled by decent growth in other office-based sectors, fueled an office-building boom

From 2012, when tech hiring picked up, to its peak in mid-2022, office inventory across the Seattle region expanded 18%, or by 31 million square feet, according to analysis by the Seattle office of real estate firm Kidder Mathews.

One of the hottest spots was downtown Seattle and South Lake Union, where inventory grew by nearly a third, or the equivalent of roughly 700 floors of new office space.

Alas, that construction blitz kept rolling even after much of that office-based hiring had peaked: Since 2022, the Seattle area gained another 360 floors worth of new office space, as of July, according to Kidder.

And “pretty much anything that came onto the market after the pandemic (started) was not needed,” said Steven Bourassa, director of the Washington Center for Real Estate Research at the University of Washington.

To the contrary, office demand in some neighborhoods actually went negative, with employers reducing their office footprints" and putting entire floors on the sublease market.

Seattle became the poster child for this pullback.

Today, 32% of office space across the city, and 37% in downtown, is either vacant or on the sublease market, according to Colliers, a commercial real estate firm.

But even the Eastside, which has become the preferred location for some regional employers, has struggled recently.

Since 2023, Microsoft has moved out of nearly 2 million square feet in Bellevue in part as it consolidated operations on its newly expanded Redmond campus. Facebook parent Meta has given up space in Bellevue's Spring District while Amazon paused or slowed construction of office towers.

Today, total vacancy across the Eastside is 24% and 25% in downtown Bellevue, according to Colliers.

Office construction is largely on hold, except for some activity on the Eastside, thanks to low demand and market factors, like high interest rates.

But given what's on the market already, "it's going to take a long, long time to fill the space and get back to where we were pre-COVID," said John Miller, executive managing director for the Pacific Northwest and Hawaii offices of CBRE, a commercial real estate company.

Mixed signals

To be fair, back in 2022, it was far from clear that office demand really had gone away.

Tech sector hiring surged early in the pandemic, in response to spiking demand for remote work services and for consumer services like online retail, streaming entertainment and gaming.

And remote work was still optimistically understood as a temporary interruption after which demand for new office space would resume its pre-pandemic trajectory.

Back then, the main uncertainties facing the office market appeared to hinge on the remote work strategies at Amazon, Microsoft and other “really big anchor companies,” said Anneliese Vance-Sherman, chief labor economist at the state Employment Security Department. “What were their return-to-office policies going to look like?"

That isn't how things worked out. While many employers have implemented return-to-office policies, the practice hasn't been as widespread or as vigorously enforced as some expected.

Many firms still allow hybrid arrangements, and nationally, the average number of days employees are required to be in-office is just 3.5, according to the consulting firm McKinsey.

As of July, the number of workers in downtown Seattle was still just 66% of pre-pandemic levels, according to cellphone data posted by the Downtown Seattle Association.

Even as companies brought workers back, many did so with offices that had been downsized to accommodate hybrid schedules and cut costs.

One high-profile example: In late 2023, mega Seattle law firm Perkins Coie said it would vacate nearly 300,000 square feet at the 1201 Third Avenue building for a space half the size at the Russell Investments Center on Second Avenue; Perkins’ new space will be designed specially for “hybrid work and hoteling.”

All told, that office pullback has utterly disrupted the former office ecosystem.

Big landlords have seen revenues tumble and, in some cases, such as with downtown Seattle office pioneer Martin Selig, have lost entire office buildings to foreclosure.

The construction sector, a major employer in its own right, has also been hit. Since mid-2022, the Seattle area has lost around a third of the construction jobs it gained during the boom.

A long, slow recovery

For all that, the office market is showing some signs of life.

Leasing activity is picking up again in some submarkets, said CBRE's Miller and other real estate insiders.

In the first half of 2025, office space under new or renewed leases was up 38% compared to the same period in 2022, according to commercial real estate company Cushman & Wakefield.

The size of the average office lease, which had crashed in 2022 as companies looked for smaller digs, is creeping back up in some markets, according to Cushman. That could indicate the downsizing trend may be slowing.

But hurdles remain.

One is historical: The days when mega employers like Amazon leased entire office buildings may well be over.

A decade ago, office towers still under construction were "getting leased up almost immediately by some tech company taking down 500,000 to a million square feet," said CBRE's Miller.

Outside of a few recent exceptions, such as large leases in Bellevue by Pokémon and by data cloud firm Snowflake, "those types of deals just aren't occurring right now," Miller said.

The absence of those mega deals is one reason "it could take up to 10 years in some cases" to work through the region's current surplus of office space, Miller added.

The other hurdle is the job market. While no one thinks the tech industry is done growing, many industry experts say the industry's pre-COVID hiring boom won't be replicated.

Instead, companies like Amazon, Microsoft and Meta, which were already "right-sizing" their workforces after years of over-hiring, are now shifting spending away from human talent and toward AI technologies.

And, ultimately, those new technologies are expected to enable tech firms, and many other white-collar firms, to be more productive while potentially using less labor, which could mean even less demand for office space.

All told, hiring in the sectors that have fueled office growth for much of the last decade will likely proceed at much slower pace.

And bringing up the rear is likely to be tech, the sector that once led the charge.

"This is a sector that was extremely high growth" for more than a decade, said Vance-Sherman, the state economist. "Perhaps it just reached a certain maturation.

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