Is Working From Home Here to Stay?
Big Tech Extends Remote Work Policies
In early March, workers across America converted their bedrooms and kitchens into home offices. Most expected this period of working from home to be a quick anomaly, but employees at some companies will not be returning to the office for months or even years to come.
Facebook (FB) CEO Mark Zuckerberg recently announced that the company will allow employees to work from home until the end of 2020, and will not plan meetings of over 50 people until July 2021 at the earliest. Facebook was one of the first companies to make the transition to remote work when coronavirus set in. It provided $1,000 to employees to help pay for childcare and other work-from-home necessities. Other tech companies are implementing similar policies. Google (GOOGL) and Zillow (Z) will allow employees to work from home for the remainder of 2020. Amazon (AMZN) and Microsoft (MSFT) will ask employees who can work at home to stay out of the office until October.
Twitter (TWTR) is taking a more extreme approach. The company’s CEO Jack Dorsey emailed employees saying that they would be allowed to work from home indefinitely. A spokesperson from the company stated , “If our employees are in a role and situation that enables them to work from home and they want to continue to do so forever, we will make that happen.”
Ripple Effect of Working from Home
The rapid shift to remote work has raised big questions for businesses that rely on the ecosystem created by millions of workers going to the office each day. Iconic Manhattan office buildings have been sitting vacant for months and some wonder if they will make a comeback.
Barclays (BCS), JPMorgan Chase (JPM), and Morgan Stanley (MS) employ over 20,000 people in New York and together lease over 10 million square feet of office space in the city. For context, that’s roughly equal to all the office space in downtown Nashville. These companies have kept most of their workforce at home for months and may not return to pre-coronavirus norms. As Barclays CEO Jes Staley noted , “The notion of putting 7,000 people in a building may be a thing of the past.”
If working from home continues, the office real estate industry could suffer. The web of restaurants, gyms, transportation systems, and other businesses that rely on a daily flow of people from their homes to the office could also be upended.
Additionally, cities could be strapped for tax revenue if big changes in the real estate industry occur. About a third of New York’s tax money comes from real estate. Shifts in the industry could leave the city without enough revenue for police, street repairs, trash pickup, and pandemic recovery initiatives.
Some Offices Reopen with Creative Solutions for Keeping Workers Healthy
Despite the changes in work patterns and the worries that come with them, some people, even in the office real estate industry, are looking towards the “new normal” with optimism. Vornado Realty Trust and Empire State Realty Trust, two of the largest landlords in New York, have noted that after this period of social distancing, some companies and workers will appreciate the value of face-to-face communication more than ever. New York City real estate has bounced back from crises from the 1918 Flu pandemic to the 2001 terrorist attacks, and many believe it will do the same once the coronavirus dust clears.
Some companies are already planning a safe, healthy return to the office using innovative solutions to prevent the spread of infections. McCann Workgroup, an ad agency owned by Interpublic Group (IPG) is considering splitting workers into groups and rotating who is at the office on different days of the week. Squarespace Inc. will invite workers to return to the office, but will require only one person to ride its elevators at a time. WeWork and other co-working companies are redesigning office layouts so that workers will be able to social distance. Discover Financial Services (DFC) is reopening offices, but taking measures to make sure that, in case of another outbreak, workers will be able to take home all necessary work equipment in 24 hours.
The “new normal” is taking on many different forms. While transitions can be difficult emotionally and financially, they can also spark creativity, as evidenced by the ways that companies and workers are adapting.
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