It seems that when companies construct and move in to massive new headquarters, more often than not the event ends up marking the beginning of their downfall.
Remember the Pan Am building in New York City? The downfall of Pan Am can be traced directly to 1963 when Pan Am moved into its brand new highly-visible headquarters. Pan Am is long since departed. For many years the building has been rebranded as the MetLife building.
AT&T’s new building was completed in 1984 at the very same time that it had already been under an order to break up its telephone monopoly. Charles Brown decided to keep long distance and divest AT&T of the regional operating divisions that subsequently became known as the “Baby Bells.” Who remembers when long distance was actually a big thing?
Sears Tower opened in Chicago in 1973. About the same time, Sears stock began a decline from which it has never managed to recover to it’s former glory. Even before Sears Tower opened, there were already signs of trouble as they failed to recognize new competitors such as K-mart that were already eating into their business.
Tech companies seem to suffer the same curse of the new headquarters.
In 1999, Excite @ Home (remember that?) moved in to a shiny new headquarters across the street from it’s original location. Excite @ Home only had one profitable quarter. After the move to the new HQ, it entered a $35 billion dollar death spiral.
Remember when AOL merged with Time Warner? AOL Time Warner began building a new corporate headquarters in 2000. Between the time construction started until the building actually opened, AOL Time Warner stock had lost about 78% of it’s previous value.
Yahoo burned a bunch of money on new corporate headquarters a number of years ago. What ever became of Yahoo? Remember the jingle – “Yaa Hoo!!!”
So, when companies start talking about building that massive new headquarters, it is a safe bet to expect that their inevitable downfall has started in earnest.