Google scales back office plan

Google is cutting back on its plans to expand into a new campus in Kirkland, opting to sublease a third of its gleaming new complex overlooking Lake Washington.

The company still hasn't moved into the 7.2-acre spread on Sixth Street, which was largely finished last summer.

It's now planning to occupy just two of its three buildings when it moves its 500-plus engineers sometime next year from rented space in downtown Kirkland.

Google could still occupy the entire campus eventually if its growth approaches earlier projections. Last year, before the market turned, a manager said it should have 2,000 employees in the area by 2012.

Tech companies large and small are tightening belts to make it through a downturn that's crimping ad sales and forcing Web companies to reconsider optimistic growth plans.

Google's campus was started when the company was expanding its Seattle presence 100 percent a year. It's still growing here and elsewhere, but not as fast.

Chief Executive Eric Schmidt last month told investors the Mountain View, Calif.-based company would take steps to cut costs.

That led to a slowdown in hiring similar to one taking place at Microsoft and cutbacks in perks, such as Google's storied cafeterias and snack bars.

Microsoft and Google both say they're still hiring but more cautiously, while others in the industry, such as Yahoo, have undergone layoffs.

"The overarching point is we are definitely still hiring and there's no hiring freeze," spokesman Jane Penner said last week. She couldn't be reached Wednesday for comment on the office-space plans.

Cost-cutting so far hasn't overcome Wall Street concerns over market conditions. After two analysts cut their profit forecasts for the company Wednesday, Google's stock fell to $291, closing below $300 for the first time since 2005.

In Kirkland, Google recently listed one of the three buildings at Lakeview Plaza — a 63,000-square-foot facility — for sublease, according to several brokers and the online database Officespace.com.

The company had leased all three buildings of the 195,000-square-foot development in August 2007 in what was billed at the time as a major expansion of its Seattle operations.

Amenities include showers in the garage for bicyclists and a landscaped plaza with views of the lake.

Google took possession of all three buildings this spring.

The company originally intended to be ready to move in last summer, but more recently occupancy was pushed into early next year.

The broker representing Google could not be reached for comment.

Google is also vacating its current Eastside office — space it has rented near the Kirkland post office — and a smaller space it rented in Fremont, where a sales office is being consolidated with the company's Seattle engineering office.

Brier Dudley: 206-515-5687 or bdudley@seattletimes.com.

Eric Pryne: 206-464-2231 or epryne@seattletimes.com