May 3, 2023 - Business

IBM will move to new Domain building by 2027

Photo: Joe Raedle/Newsmakers

IBM will move its Austin workforce into a new, 500,000-square-foot office development in North Austin by 2027, the company is announcing today.

Why it matters: The announcement comes two days after CEO Arvind Krishna's acknowledgement that IBM plans to replace jobs with AI and as tech industry downsizing has led companies to pull back on leasing office spaces.

Driving the news: Construction for the new project at 11901 N. MoPac Expressway is expected to begin later this year, featuring two 14-story interconnected towers that include eight stories of parking.

  • IBM will occupy one full tower, plus two floors in the adjacent tower.
  • The development — designed by Houston-based Munoz & Albin — will feature outdoor space, common areas, outdoor sports amenities, fitness centers, retail spaces and outdoor terraces on every office floor, IBM officials told Axios.
  • The development will further expand the Domain's footprint as it aims to evolve into Austin's second downtown.
A rendering of the new office development in North Austin, which will house IBM's Austin workforce. The company will occupy one tower, plus two of the six floors in the adjacent tower. Photo: Courtesy of Hines

State of play: The company's Austin workforce currently works out of two buildings at the Domain — 11400 Burnet Road and 11501 Burnet Road. Officials filed a request to build new space in September.

  • IBM officials declined to disclose how many employees will work out of the new tower, although the company is one of the Austin area's largest private employers.
  • Roughly 6,000 employees are based here, according to figures from the Austin Chamber of Commerce provided to Axios on Tuesday.
  • CBRE’s Bo Beacham and John Barksdale represented the developer, Hines, in the transaction.

Between the lines: It's not clear how IBM layoffs earlier this year and the company's shift to AI and automation over the next five years could impact its Austin presence.

Yes, but: Dexter Henderson, senior local executive for IBM Austin, tells Axios that "there is not a downsizing here at all" with the move to the new building.

  • "It's just creating a modern environment to help improve productivity and get our people excited about coming back to collaborate," Henderson said.

What they're saying: Joanne Wright, IBM's Senior Vice President, called the new site an opportunity to invest in the future.

  • "We're getting every kind of business team aligned," Wright tells Axios, adding Austin teams include software, hybrid cloud, marketing, communications and financial operations groups. "They're spread between not just two buildings but also within the buildings — spread between different floors, different facilities."

The bottom line: New York-headquartered IBM was an early pioneer of Austin's tech sector, with operations here since 1967, and the move is a sign that the company will continue to invest in Central Texas.

  • "It's very clear that IBM is taking a stand that Austin is a great place to be," Henderson added.

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