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December 26, 2022 – Tech companies, which led corporate America with their shift to remote work at the pandemic’s start, are pulling back on those flexible work models in a potential sign that office mandates could be a more frequent fixture in the year ahead.
As employers become increasingly frustrated with the disconnectedness that often comes with a dispersed workforce, companies including Snapchat parent Snap Inc. and Twitter are leveraging a cloudy economic outlook in a bid to get employees back to the office. A growing number of global tech firms are reversing course on remote and hybrid work policies as the labor market for companies including Meta, Google, Alphabet and Amazon becomes increasingly challenged. Many tech companies have frozen hiring or cut jobs in the face of a sudden slowdown after the pandemic growth spurt.
The decision to claw back certain flexible work policies appears to mark a turning point in the pandemic shift to operating remotely. What’s more, brokers say it could signal an imminent spike in office use among tech businesses, many of which have been among the commercial real estate market’s most powerful economic drivers.
Tech companies were some of the country’s greatest sources of leasing and acquisition activity prior to the pandemic, scooping up hundreds of thousands of square feet to accommodate headcount growth over the years among workforces that largely commuted to an office every workday. These global tech firms accounted for more than a third of the nation’s largest 15 office leases in 2019, according to CoStar data. Deals made by Google, Amazon, Apple, Meta and others collectively totaled more than 5 million square feet at the time.
By the end of 2020, the tech industry accounted for about one-fifth of the country’s total office leasing activity, according to data from real estate brokerage CBRE, as some of the largest companies — including social media company Facebook’s parent Meta, iPhone maker Apple and software provider Microsoft — invested in the idea that offices would play a critical role in the future of work.
To be clear, remote and hybrid work policies have been embedded in the work culture that emerged from the depths of the pandemic. Even Salesforce, which recently called some of its employees back to the office, has acknowledged the permanence of flexible work in its future working environment.
“So I do think that we’re going to have a rebalancing,” Salesforce CEO Marc Benioff told analysts on the company’s earnings call in late November, adding that, even at Salesforce, the company has employees who are required to be in the office. There are “folks required to be here, whether they are doing core work, or even new folks who don’t have the tribal knowledge yet or need the mentorship or folks coming in from college who benefit from being in the office. But we’re never going back to how it was. We all know that.”
Here are some global tech companies who have decided to bring employees back to the office, either for a full or partial workweek.
Headquarters: Santa Monica, California
Number of employees: About 5,100 globally
Return-to-office policy: The corporate parent of Snapchat told employees in a memo last month that the social media company would phase out its predominantly remote work policy starting in February, with workers required to be in the office at least 80% of the time. The new mandate was issued as Snap grapples with increased competition, mounting economic uncertainty and declining advertising revenue.
Headquarters: San Francisco
Number of employees: An estimated 2,300, down from the roughly 7,500 workers the company employed prior to billionaire Elon Musk’s $44 billion acquisition
Return-to-office policy: While Twitter formally adopted a remote work policy in May 2021, Musk retracted it in November, telling the company’s remaining employees they would be required to be in an office five days a week. The new CEO’s first email to employees last month mandated that workers put in at least 40 hours a week, all of which would have to be fulfilled in a physical workspace.
Headquarters: Cupertino, California
Number of employees: More than 37,000 in the United States
Return-to-office policy: The Silicon Valley tech giant told employees to prepare to return to the office for three days a week after the long Labor Day weekend. Workers are required to head to an office on Tuesdays and Thursdays for mandatory in-person days, with a third day to be determined by individual departments. CEO Tim Cook previously said the company’s return-to-office initiative was “the mother of all experiments.” The iPhone maker has received blowback from some employees, who argue the blanket return mandate doesn’t take into account individual workers’ situations.
Headquarters: Oakland, California
Number of employees: About 1,300 across the country
Return-to-office policy: The Bay Area financial technology firm has been trying for the better part of the past year to get employees into its offices. The company, which relocated its headquarters to Oakland from San Francisco in 2021, recently told workers they would need to be in an office at least a few days a week on a schedule to be determined by individual teams. To make the space more attractive, Credit Karma stocked its new Oakland headquarters with perks such as a game room, coffee bar and rooftop lounge as well as events including sipping kombucha by the fire pit.
Headquarters: San Francisco
Number of employees: More than 70,000 globally
Return-to-office: While San Francisco’s largest employer and office real estate occupant still operates on a hybrid policy, slowing sales growth prompted it to tell some workers in November that they’d be required to return to physical workspaces. Some sales employees were told they would have to work in an office on Tuesdays and Thursdays starting at the beginning of December. The company’s remaining workforce is allowed to work remotely for as many as four days a week as part of its “work from anywhere policy,” which Salesforce adopted in 2021.
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