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> There are massive (many trillion) commercial real estate interests at play here that t That theory is bullshit though. Yes, there are companies that stand to

> There are massive (many trillion) commercial real estate interests at play here that t That theory is bullshit though. Yes, there are companies that stand to lose if office buildings clear out. But they're not the same companies that make the RTO decisions. The companies making those decisions could actually gain if they ditched the office buildings... facility cost is some absurdly large line item on the ledger for most businesses. Without a clear connection between the two, I have to chalk this up to irrationality. Companies are still run by humans, and humans are irrational more often than rational. Especially with something like this, where there's no clear precedent to steer by.

salmo 2y ago
The one thing I’ve seen are where companies have tax incentives tied to butts in seats. Usually like 0 property tax, with the government assumption that they’ll make it up in sales tax (lunch, gas, etc.) and taxes from employees that move to the town. But honestly, I think a lot of companies are just doing this instead of layoffs or in addition to small “don’t raise eyebrows” layoffs. Raise the pain to get attrition.
blackeyeblitzar 2y ago
Companies like Amazon literally own billions in office space. Making that space valuable again with RTO policies, especially if you create an RTO trend, a way of enabling them to sell at their previous values.
- hellweaver666 2y ago
  Do they actually "own" it? I work for a large company who spent millions building a new office and then immediately sold it to a different company so they could lease it instead of owning it (apparently this looks better on the books!)
  - blackeyeblitzar 2y ago
    Amazon used to lease several buildings from Paul Allen for years but ended up buying them outright, and then going on a construction binge beyond that.
  - mrguyorama 2y ago
    >apparently this looks better on the books! Or, as we have seen hundreds of times, it's sold at market price to a "third party" company that is actually owned by one of the board members or executives, which then rent it back to the company for a slight premium.
    - NoMoreNicksLeft 2y ago
      We do see this occasionally. You'll have some private equity group buy a restaurant chain like Red Lobster. They make RL lease the real estate from them after having RL sell the real estate to them. Sometimes it's not restaurants, I think this is what murdered Toys'R'Us (correct me on that if I'm wrong). But this isn't the norm, and it's not happening to well-managed businesses. It's something a vulture does after the company has been struggling for years. If that happened with a Microsoft or an Amazon, or any of the companies we work for. It's silly to suggest that is the cause of widespread RTO mandates.
chithanh 2y ago
It is not bullshit, though it does not apply universally either. In many cases it may just be managers who need to justify having spent all that money on their office spaces. That being said: Deflating a real estate bubble is painful, just ask China. By artificially keeping up demand for office spaces through unnecessary RTO, banks and governments avoid having to go through that, at least for the time being. And yes, with (partially government-guaranteed) mortgage-backed securities and all that, large-scale devaluation of commercial real estate is going to be a huge pain. In NYC where the vacancy situation is particularly dire, politicians have been banging the RTO drum for a while. https://www.bloomberg.com/news/articles/2023-03-30/wall-street-needs-pact-to-get-new-yorkers-in-offices-adams-says https://www.bloomberg.com/news/articles/2023-03-30/wall-stre...
- CydeWeys 2y ago
  > In many cases it may just be managers who need to justify having spent all that money on their office spaces. I find this argument uncompelling as everyone can obviously see that things changed since February 2020, and sunk costs do not justify throwing more good money after bad. It could easily have been the correct decision to acquire more office space years back and it could just as easily now be the correct decision to divest that office space if more workers are remote, and it's not anyone's fault for not having seen into the future that there'd be a global pandemic.
  - chithanh 2y ago
    > things changed since February 2020 Certainly nobody will blame managers for real estate decisions which were made prior to 2020. But a large number of companies revised expectations that workers would return to office as late as Q1 2023 and some even later. https://www.vox.com/technology/2023/5/15/23721410/return-to-office-remote-work-commercial-real-estate https://www.vox.com/technology/2023/5/15/23721410/return-to-... > sunk costs do not justify throwing more good money after bad Sure. In a rational world, the office space costs are sunk and everybody just moves on. But seeing that RTO just decreases competitiveness for hiring without hard benefits to show for, this indicates that the decisions are not rational. The sunk cost fallacy is easy to fall for, and that is even before considering how business leadership roles attract narcissists who have a hard time taking blame for anything.
wesselbindt 2y ago
If I have to choose between "the owning class colludes" and "the owning class is acting irrationally, and just coincidentally happen to act in accordance with the interests of other members of the owning class", Occam's razor points me toward the first.
- contrast 2y ago
  The first is a complex solution that would require many elements to work. The second requires nothing at all; it couldn't be simpler. Why would Occam's Razor point you to the first?
  - wesselbindt 2y ago
    The simplicity of "it's all just a coincidence" is about the same as "it's all just magic". And you would be right about the collusion explanation's need for some elements to work, were it not for the fact that we see those elements working together in broad daylight. They attend the same universities, join the same clubs, they even have a town in Switzerland that's become synonymous with the owning class meeting up (Davos).
    - woooooo 2y ago
      They're not saying it's coincidence, they're saying it's herd behavior and groupthink.
      - NoMoreNicksLeft 2y ago
        The people we're talking to don't really understand those concepts. Or possibly they just reject them implicitly (which would be an even stranger explanation).
        wesselbindt 2y ago
        Yeah and I hear they're stinky, too.
Lutger 2y ago
Totally. A lot of corps are ruled by management and sales people. Those often really enjoy talking and connecting, and it is a form of control for them. Of lot of these people think they can't do their job well if the quiet people (IT, devs) disappear into their homes. And they often genuinely think the workforce needs to have meetings and show up to be accountable. They don't really think about what IT people actually need, or they do sometimes but it won't be a decisive factor in the end. I've worked in places where sales people were seated next to programmers, and the sales people were shouting through their phones continuously. The programmers complained endlessly about all the noise - without effect. First lockdown we had showed an increase of at least 300% productivity - hard and reliable numbers because all output was tracked voluntarily by the team (management never asked for this). Number of builds, commits, releases...everything was way up. It was quite shocking. As soon as lockdowns were lifted managers began talking about being in the office fulltime, because it was so good to talk to each other and align your work. I remember working in a team that did 1 day a week at the office, that day we couldn't get anything done because everybody was just chit chatting all the time. Even if you wanted to - it was just impossible to focus. Our security officer (CISO) remarked how the lockdown enabled him to think seriously about a security issue for the first time in almost two years. Isn't that tragic? Companies are as rational as consumer behavior. You can't make this stuff up. Never attribute to malice that which is adequately explained by stupidity.
- scottyah 2y ago
  I'd be very interested to hear the perspective of your sales and management teams. Your view is obviously very biased and only tracks "productivity" from the programmers. "Number of builds, commits, releases" off-handedly does not sound like straight progress, typically fast direction changing (adapting to the business environment) from management and sales is what drives profit. Code is not an asset, it is a liability. The loss of programmer productivity can easily be overshadowed by gains from other parts of the business. I know it's not always the case, and nobody wants to hear that their suffering is better for the company as a whole since it devalues your work, but I would be super curious to hear why the decision was made.
  - 2y ago
lazide 2y ago
‘Be careful what you wish for’ - if remote work is the norm, there is all the sudden massive downward competitive pressure on salaries, as now people can work from much lower cost of living areas. Or even lower cost of living countries. Either officially, or unofficially. What globalization did to manufacturing, remote work is going to do to knowledge work. And in most cases, if the bosses give up on RTO, they’re going to be explicit about this. Because why not?
- chithanh 2y ago
  I don't think that is an issue. Yes, companies which insist on RTO have to pay more, but as extra compensation in order to make up for the difference in time and money spent commuting. But I'd argue what could be outsourced profitably has been outsourced already. And countries which welcome digital nomads who "work from home" while visiting on tourist visas are getting fewer also. In fact the Thai Government launched DTV which can be seen as precursor to measure and later capture (read: tax) some of the benefits of that for themselves.
  - lazide 2y ago
    Remote work means ‘outsourcing’ for a FAANG includes Ohio (prev. Sunnyvale), not just India. And if you think this isn’t having an effect on offered labor rates, available positions in certain countries, etc. then you’re not paying attention to the current market. There are massive shifts to offshore work at most FAANGs actively going on right now. But it takes time. Are there attempts to crack down/extract extra taxes? Yeah. But most are ineffective and/or don’t meaningfully change the economics. There is a lot of fat that can be trimmed/extracted from the super high peak of Silicon Valley comp (for one example). A lot of folks in the US are just waiting to see what happens before they move, or are stuck with high mortgages.
chaosist 2y ago
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salmo 2y ago

The one thing I’ve seen are where companies have tax incentives tied to butts in seats. Usually like 0 property tax, with the government assumption that they’ll make it up in sales tax (lunch, gas, etc.) and taxes from employees that move to the town. But honestly, I think a lot of companies are just doing this instead of layoffs or in addition to small “don’t raise eyebrows” layoffs. Raise the pain to get attrition.

blackeyeblitzar 2y ago

Companies like Amazon literally own billions in office space. Making that space valuable again with RTO policies, especially if you create an RTO trend, a way of enabling them to sell at their previous values.

hellweaver666 2y ago
Do they actually "own" it? I work for a large company who spent millions building a new office and then immediately sold it to a different company so they could lease it instead of owning it (apparently this looks better on the books!)
- blackeyeblitzar 2y ago
  Amazon used to lease several buildings from Paul Allen for years but ended up buying them outright, and then going on a construction binge beyond that.
- mrguyorama 2y ago
  >apparently this looks better on the books! Or, as we have seen hundreds of times, it's sold at market price to a "third party" company that is actually owned by one of the board members or executives, which then rent it back to the company for a slight premium.
  - NoMoreNicksLeft 2y ago
    We do see this occasionally. You'll have some private equity group buy a restaurant chain like Red Lobster. They make RL lease the real estate from them after having RL sell the real estate to them. Sometimes it's not restaurants, I think this is what murdered Toys'R'Us (correct me on that if I'm wrong). But this isn't the norm, and it's not happening to well-managed businesses. It's something a vulture does after the company has been struggling for years. If that happened with a Microsoft or an Amazon, or any of the companies we work for. It's silly to suggest that is the cause of widespread RTO mandates.

chithanh 2y ago

It is not bullshit, though it does not apply universally either. In many cases it may just be managers who need to justify having spent all that money on their office spaces. That being said: Deflating a real estate bubble is painful, just ask China. By artificially keeping up demand for office spaces through unnecessary RTO, banks and governments avoid having to go through that, at least for the time being. And yes, with (partially government-guaranteed) mortgage-backed securities and all that, large-scale devaluation of commercial real estate is going to be a huge pain. In NYC where the vacancy situation is particularly dire, politicians have been banging the RTO drum for a while. https://www.bloomberg.com/news/articles/2023-03-30/wall-street-needs-pact-to-get-new-yorkers-in-offices-adams-says https://www.bloomberg.com/news/articles/2023-03-30/wall-stre...

CydeWeys 2y ago
> In many cases it may just be managers who need to justify having spent all that money on their office spaces. I find this argument uncompelling as everyone can obviously see that things changed since February 2020, and sunk costs do not justify throwing more good money after bad. It could easily have been the correct decision to acquire more office space years back and it could just as easily now be the correct decision to divest that office space if more workers are remote, and it's not anyone's fault for not having seen into the future that there'd be a global pandemic.
- chithanh 2y ago
  > things changed since February 2020 Certainly nobody will blame managers for real estate decisions which were made prior to 2020. But a large number of companies revised expectations that workers would return to office as late as Q1 2023 and some even later. https://www.vox.com/technology/2023/5/15/23721410/return-to-office-remote-work-commercial-real-estate https://www.vox.com/technology/2023/5/15/23721410/return-to-... > sunk costs do not justify throwing more good money after bad Sure. In a rational world, the office space costs are sunk and everybody just moves on. But seeing that RTO just decreases competitiveness for hiring without hard benefits to show for, this indicates that the decisions are not rational. The sunk cost fallacy is easy to fall for, and that is even before considering how business leadership roles attract narcissists who have a hard time taking blame for anything.

wesselbindt 2y ago

If I have to choose between "the owning class colludes" and "the owning class is acting irrationally, and just coincidentally happen to act in accordance with the interests of other members of the owning class", Occam's razor points me toward the first.

contrast 2y ago
The first is a complex solution that would require many elements to work. The second requires nothing at all; it couldn't be simpler. Why would Occam's Razor point you to the first?
- wesselbindt 2y ago
  The simplicity of "it's all just a coincidence" is about the same as "it's all just magic". And you would be right about the collusion explanation's need for some elements to work, were it not for the fact that we see those elements working together in broad daylight. They attend the same universities, join the same clubs, they even have a town in Switzerland that's become synonymous with the owning class meeting up (Davos).
  - woooooo 2y ago
    They're not saying it's coincidence, they're saying it's herd behavior and groupthink.
    - NoMoreNicksLeft 2y ago
      The people we're talking to don't really understand those concepts. Or possibly they just reject them implicitly (which would be an even stranger explanation).
      - wesselbindt 2y ago
        Yeah and I hear they're stinky, too.

Lutger 2y ago

Totally. A lot of corps are ruled by management and sales people. Those often really enjoy talking and connecting, and it is a form of control for them. Of lot of these people think they can't do their job well if the quiet people (IT, devs) disappear into their homes. And they often genuinely think the workforce needs to have meetings and show up to be accountable. They don't really think about what IT people actually need, or they do sometimes but it won't be a decisive factor in the end. I've worked in places where sales people were seated next to programmers, and the sales people were shouting through their phones continuously. The programmers complained endlessly about all the noise - without effect. First lockdown we had showed an increase of at least 300% productivity - hard and reliable numbers because all output was tracked voluntarily by the team (management never asked for this). Number of builds, commits, releases...everything was way up. It was quite shocking. As soon as lockdowns were lifted managers began talking about being in the office fulltime, because it was so good to talk to each other and align your work. I remember working in a team that did 1 day a week at the office, that day we couldn't get anything done because everybody was just chit chatting all the time. Even if you wanted to - it was just impossible to focus. Our security officer (CISO) remarked how the lockdown enabled him to think seriously about a security issue for the first time in almost two years. Isn't that tragic? Companies are as rational as consumer behavior. You can't make this stuff up. Never attribute to malice that which is adequately explained by stupidity.

scottyah 2y ago
I'd be very interested to hear the perspective of your sales and management teams. Your view is obviously very biased and only tracks "productivity" from the programmers. "Number of builds, commits, releases" off-handedly does not sound like straight progress, typically fast direction changing (adapting to the business environment) from management and sales is what drives profit. Code is not an asset, it is a liability. The loss of programmer productivity can easily be overshadowed by gains from other parts of the business. I know it's not always the case, and nobody wants to hear that their suffering is better for the company as a whole since it devalues your work, but I would be super curious to hear why the decision was made.
- 2y ago

lazide 2y ago

‘Be careful what you wish for’ - if remote work is the norm, there is all the sudden massive downward competitive pressure on salaries, as now people can work from much lower cost of living areas. Or even lower cost of living countries. Either officially, or unofficially. What globalization did to manufacturing, remote work is going to do to knowledge work. And in most cases, if the bosses give up on RTO, they’re going to be explicit about this. Because why not?

chithanh 2y ago
I don't think that is an issue. Yes, companies which insist on RTO have to pay more, but as extra compensation in order to make up for the difference in time and money spent commuting. But I'd argue what could be outsourced profitably has been outsourced already. And countries which welcome digital nomads who "work from home" while visiting on tourist visas are getting fewer also. In fact the Thai Government launched DTV which can be seen as precursor to measure and later capture (read: tax) some of the benefits of that for themselves.
- lazide 2y ago
  Remote work means ‘outsourcing’ for a FAANG includes Ohio (prev. Sunnyvale), not just India. And if you think this isn’t having an effect on offered labor rates, available positions in certain countries, etc. then you’re not paying attention to the current market. There are massive shifts to offshore work at most FAANGs actively going on right now. But it takes time. Are there attempts to crack down/extract extra taxes? Yeah. But most are ineffective and/or don’t meaningfully change the economics. There is a lot of fat that can be trimmed/extracted from the super high peak of Silicon Valley comp (for one example). A lot of folks in the US are just waiting to see what happens before they move, or are stuck with high mortgages.

chaosist 2y ago

[dead]