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I understand that in practical terms giving every employee their own private office might be unrealistic. I would love to just sit in a smaller room with my immediate team/subteam.

I don't think it's unrealistic, it's just that our expectations have gone (way) down after years of abuse. The cost of an employee is at least a magnitude larger than the extra cost that comes with giving them a private office. So if it makes an employee at least 10% more productive (in my experience the gain is definitely more than 10% but YMMV) it's a financial win.

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