An analysis by Savills, the real estate advisory firm, suggests that artificial intelligence is currently having a smaller impact on office employment in Europe than public debate may imply. The main drivers of growth in office-based jobs remain economic conditions and business sentiment rather than the level of AI adoption among companies.
According to Oxford Economics, office employment in Europe could increase by around 4% over the next decade, supporting demand for office space.
The economy sets the pace
The analysis shows that the relationship between AI adoption and office employment growth is weak to moderate. The Nordic countries and Benelux markets are among the most advanced in their use of AI, yet their slower employment growth is mainly linked to their high level of economic development and near-full employment rather than technology displacing workers.
A much stronger relationship can be seen between economic growth and office employment. According to Savills, the historical correlation between GDP growth in the European Union and office employment growth stands at +0.825. This indicates that the key factors for the office market remain the pace of economic expansion, corporate investment and companies’ overall willingness to hire.
AI is supporting recruitment rather than job cuts
At the same time, companies investing in AI are not necessarily reducing their headcount. Results from a European Central Bank survey conducted in March 2026 indicate that businesses making intensive use of AI are around 4% more likely to increase employment. Companies investing in AI are also nearly 2% more likely to hire new staff than those that do not make such investments.
“The debate around AI often focuses on the risk of job cuts, but the data paint a more complex picture. Companies investing in new technologies usually do so to improve productivity and support future growth, rather than simply to reduce costs. For the office market, this means that AI is more likely to become another factor reshaping the way people work than a straightforward substitute for demand for space,” said Jarosław Pilch, Head of Tenant Representation, Office Agency at Savills.
Europe’s labour market is currently normalising after the period of elevated demand for workers seen in 2022 and 2023. In professional services, a sector particularly important to the office market, the EU job vacancy rate stands at 2.4%, remaining close to pre-pandemic levels.
At the same time, Savills data, including figures from central London, point to a record level of active requirements from companies in the professional services sector.
AI is increasing uncertainty among both employers and employees, but it does not change the underlying mechanism of the office market. In the short term, occupier decisions are likely to remain cautious due to slower economic growth and geopolitical tensions. Over the longer term, productivity, access to talent and the quality of the working environment are expected to become increasingly important.
“Artificial intelligence may change the structure of employment and the way work is organised, but it does not eliminate the need for well-designed offices. Companies will still require spaces that support collaboration, team integration and the development of organisational culture. From an occupier perspective, location, workplace flexibility and the ability of office space to support different working models will become even more important,” Pilch said.
Supply-side constraints and demographics
Savills also points to supply-side constraints in the European labour market. Over the past decade, the number of working-age people in the EU has fallen by 4 million, while unemployment remains at a record low of 5.8%. This means that even as companies take a more cautious approach to recruitment, attracting employees remains difficult.
Outlook: a more polarised office market
Savills expects AI to be one of the structural forces reshaping the office market, much as workplace densification, Brexit and the pandemic have been in the past. However, this does not mean the end of demand for offices.
A more likely scenario is further market polarisation. Companies are expected to reduce their exposure to weaker and less efficient buildings while maintaining demand for modern, well-located offices that support productivity and help attract and retain talent.
Source: https://ceo.com.pl/sztuczna-inteligencja-nie-wygasza-popytu-na-biura-w-europie-94601
