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76% of American CEOs say they may shrink office space
- jacquesm 6y agoNot just American CEOs. We just gave up 2/3rds of our office space and are entirely remote. We still have the office mostly as a place that 'anchors' the company in a legal sense but in the future that might just become a PO box at this rate. Ironically, in November last year we just expanded and then within two months that turned out to be a bad decision. Fortunately I always keep leases short even if that is a bit more expensive per month it gives more flexibility and that has been an asset several times over the last 35 years already.
- jimbob45 6y agoConversely, our CEO signed a five-year lease last year and is trying to get everyone back in the office under specious pretenses. Always ask for a force majeure contract clause!
- lquist 6y agoThere is going to be a lot of pain but overall I think this is very good for the economy. Rents that went to landlords will be redirected to more productive purposes (or profit, which when distributed to shareholders will be reinvested).
- cobookman 6y agoWouldn't rents just shift from cities to suburbs, offices to homes/banks.
- ghaff 6y agoTo some degree. Some people will choose to upgrade their home space--albeit often in less dense locations--but if utilization increases that's generally a win overall.
- albacur 6y agoAt least in San Francisco Bay Area, which has one of the worst housing markets in the country, it would be a net win. For some people who've lived here a while and bought a house for cheap or have rent control, they're making money hand over fist. But for the rest of us, a huge portion of our paychecks goes to landlords or paying a mortgage. It would be much more reasonable in almost any other US suburb and most US cities.
- mrfusion 6y agoTechnically the rents should go to the employees now devoting parts of their homes (and utilities) to work.
- pan69 6y agoFirst we started bringing our own laptops, now we're bringing our office. Sure, there are lots of people who are getting issued a laptop from their employer but there are also a lot of people that don't.
- myself248 6y agoI got an email from my electric utility this summer, pointing out that I was using MASSIVELY more electricity than the same month last year. Like, roughly triple. When I was at work every day, I had my HVAC on a pretty drastic setback; no sense cooling an empty house. I guess it worked pretty well! Because this year I was home all summer and despite not wearing pants most of the time, it still took a fair bit of power to keep things not-sweaty.
- stuff4ben 6y agoI've never been a big proponent of remote work. I've always had bosses who were "butts in seat" (with accommodations every now and then) and that's how I've always been. But the past 9 months I've been working from home and I've enjoyed it. But as soon as the vaccine is widely available and I've taken it, my butt will be back in my office seat, provided it's still there.
- jacquesm 6y agoProvided the company you work for still exists. In your case that might be a given but overall I think the coming six months will be written about in history books a century from now. Of all the crises that I've seen in my life to date (Oil crisis (73), black Monday (87), .com bust (2000), Global financial crisis (2009) and this one I think this one is by far the most disruptive and serious. We'll see how it plays out but so far the experience here in NL is absolutely surreal. And the worst is yet to come by all indicators.
- AznHisoka 6y agoThe worst in terms of health or financial effects?
- deleted 6y ago[deleted]
- disiplus 6y agoall those are financial, so i would assume financial.
- jacquesm 6y agoVery likely both.
- dajohnson89 6y agoI'd love to hear your precise rationale on the financial side.
- anonAndOn 6y agoThis process is well underway in SF where formerly booming business districts have turned into veritable ghost towns. Winter is coming for commercial real estate.
- nosmokewhereiam 6y agoI'm excited for the Mr Robot-esque urban explorations of these empty business mansions.
- asdff 6y agoThey will just flip to housing if they can't find office demand.
- dev_throw 6y agoYep. This happened in Calgary back in 2013-16 when oil fell off a cliff and office vacancies skyrocketed. A lot of prime downtown office spaces became either coworking spaces or refurbished into luxury apartments.
- bamboozled 6y agoWhy I think offices will just catch back on is because they will come down in price and because those who work closer to the people at the top of the company will be those promoted, this will make the pressure of working in an office greater again. Maybe this move is also the end of middle management and traditional CEOs? I hope I’m wrong about office life catching back on because of all the emissions being saved by remote work...
- user5994461 6y agoCounterpoint: Most workers get no promotions, they'd be lucky to have a 1% inflation adjustment. They couldn't care less about any pressure to go back to the office.
- mrfusion 6y agoMaybe the governor can make an emergency order that remote workers get promotions?
- rpgmaker 6y agoBut every worker wants to be the one getting the promotion.
- itake 6y agoI'm spending an extra $300-$500 / mo in home office expenses (food, coffee, power, internet, AC, sq footage, etc.) now that I work from home. I'd love to be back in the office to be near the gym and enjoy the amenities.
- saddestcatever 6y agoReally? What expenses have gone up? Food? Unless your company provided a LOT of food? Are you paying more for internet? Paying more for sq footage? Curious
- bamboozled 6y ago
- Shivetya 6y agowell we lost most of our contractors when the pandemic hit but the new move has been to outsource and starting with support groups. since they own their buildings it may not be as simple to dispense with the added space but this does not mean they cannot simply shut down entire floors to save money. The fallout people keep missing is the loss of tax revenue. Either the direct property tax as values drop to in some cases income taxes shifting to other locales. Throw in the reduction in spending at local associated businesses like restaurants and stores which also results in lower sales tax revenue and eventually staffing. It is quite the cascade effect that will happen.
- jacquesm 6y agoYes, this knock-on or 'domino' effect is severely underestimated.
- ghaff 6y agoA lot of modern urbanites are probably too young to remember just how bad a lot of American cities were in the 70s/80s. A city like Boston was still losing population well into the 90s. It wasn't just Detroit. It would be very easy for the relatively recent urbanization trend to reverse for another generation or more.
- vosper 6y ago> The fallout people keep missing is the loss of tax revenue. Either the direct property tax as values drop to in some cases income taxes shifting to other locales. Throw in the reduction in spending at local associated businesses like restaurants and stores which also results in lower sales tax revenue and eventually staffing. It is quite the cascade effect that will happen. I think we might see the opposite in some subset of small towns - probably the ones in and around areas of natural beauty, or hot-spots for hobbies like rock climbing or skiing. I'm guessing some places are small enough that it wouldn't take a huge number of well-paid remote elite moving in/nearby to boost local government coffers, and possibly make some businesses viable that weren't before.
- 6y ago
- TrainedMonkey 6y agoAlternative title: "76% of people large portion of whose jobs is to represent the company as cool, trendy, and modern say they will do a trendy thing." There will certainly be some change after the pandemic ends, but it is extremely difficult to estimate how much.
- mrfusion 6y agoLove it. Nice succinct dismissal!
- strombofulous 6y agoI'm honestly asking because I can't tell, but is that sarcasm?
- mrfusion 6y agoIt is hard to tell. But I actually liked your dismissal. So concise.
- geodel 6y agoAny cool, trendy and modern thing tend to stay if it can save some money for a company. Good example is open office. I haven't heard companies pointing to studies that shows a nice cubicle with walls is better for employee's mental health than open office. On the other hand they keep telling how open office promotes open collaboration etc because it saves them money. People keep saying that productivity will go down will all remote arrangements. But so far assumptions have that company has to worry about it. However I feel once employee/team/projects been identified for low productivity it's them that have to worry. The reason is simple, barring few top percent of employees most do not have any negotiating power on whether to work from home or from office or few days from office to preserve their office seat etc. So to think that low productivity will bring every one to office seems unlikely.
- bleepblorp 6y agoManagers taking steps to prevent their employees from contracting a disease that will prevent them from working for weeks or months is 'trendy?' A workplace that's shut down for weeks because of a SARS-CoV-2 outbreak is a workplace that's not making any money. Taking all reasonable steps to minimize employee exposure to infectious diseases just makes good business sense.
- deleted 6y ago[deleted]
- op03 6y agoWhats happening at Apple's spaceship? Is it empty? Can I squat there?
- birdyrooster 6y agoIt's always mostly empty, and that's by design.
- rossdavidh 6y agoSo, you're saying nearly a quarter of American CEO's won't even say they "may" reduce office space by some amount? That is so vague (and non-binding in any case) that I am kind of surprised they didn't get 99%, with only the CEO's of office space subleasing companies not joining in. I have WFH for several years now, I'm not opposed to it, but the idea that it's going to become the "new normal" seems, at the least, premature. My guess is that the long-term impact will be less than currently expected.
- ed_balls 6y agoIt's not binary (remote or office). My company was going to rent about 600 extra desks this year, but we added 0. Management is surprised how much we got done while being 100% remote. After the pandemic we will come back to a hybrid work schedule - 2 or 3 days a week from the office and hot desking.
- neverartful 6y agoTrue, but the question about whether they "may reduce office space" is binary.
- Gene_Parmesan 6y agoCall me oldfashioned (despite being early 30s), but hot desking does not sound appealing to me. I want to feel like I have a space that's mine at work. Where would I store my work papers? Right now at my work desk I have a little library of technical books. What about putting up pictures of family? Decorations during holidays? The older I get the more these things are important to me, as silly as they may sound. Perhaps it's because work becomes a larger and larger portion of my life. When I was fresh out of school it kind of felt like something I did for X hours before coming home to my "real" life, like a pseudo-school environment. But as time passes (and if you like where you work), work can become a bit of a second family. Having my own space adds a sense of belonging and stability that really acts to boost my productivity and sense of team commitment. I did something that that basically amounted to hot desking at a previous job and I found it miserable. I never felt settled. Perhaps there is some sort of introvert/extrovert thing going on. I am social and love my coworkers but at heart I'm an introvert; having my little space gives me a sense of being able to retreat a bit. Paradoxically that improves my sense of belonging -- it begins to feel a bit homey. Maybe extroverts are able to fully get their sense of belonging just from being around people. I do think that flexibility will probably be the way forward. If Bob wants to be full time remote, and Mary wants to be a hybrid, totally reasonable. I would just seriously miss "my" space.
- ejz 6y agoRemember when Eric Schmidt thought COVID-19 was going to increase demand for commercial real estate?
- draw_down 6y agoNo
- hogFeast 6y agoMore downsizing. Where will it end? An office for ants? How can we expect workers to labor if they can't even fit in the building?
- say_it_as_it_is 6y agoBut why male models?
- mensetmanusman 6y agoThis works well for people who already have a social network at their job. Very challenging to build relationships in a zoom environment, feel bad for all the new folk at their jobs.