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I’ve heard this argument before and I don’t buy it. By that, I mean it may be true (that people want to prop up real estate prices), but I don’t think that this
by klodolph 2y ago
I’ve heard this argument before and I don’t buy it. By that, I mean it may be true (that people want to prop up real estate prices), but I don’t think that this is enough of an explanation.
If it were just about real estate, then Amazon would not be calling for 5 days a week return-to-office. I don’t think real estate interests are powerful enough to push Amazon around and I don’t think they’re entrenched enough in Amazon leadership to make it happen. As an alternative contributing factor, I suggest that Amazon wants employee attrition, and five day return-to-office is a convenient tool for that. One of the things that makes return-to-office such a convenient tool for employee attrition is that it’s a deniable tool.
In cities like New York, it’s pretty clear that commercial real estate interests are in bed with the city government. I just don’t think that real estate has enough power to push through a return-to-office agenda at the scale that we’re seeing. Don’t get me wrong, I think commercial real estate interests have a ton of influence. I just don’t think it’s enough influence to explain RTO at this scale (but it can explain RTO policies in some specific cases).
- Log_out_ 2y agoIts about socio pathic no life loners with power wanting company,the company be damned.
- ronjakoi 2y agoCan you please explain what you mean by employee attrition to a non-native English speaker?
- vertalexgraph 2y agoThey're hoping a bunch of people quit (instead of complying with the mandate) to reduce headcount/the negative PR of layoffs.
- deleted 2y ago[deleted]
- shwouchk 2y agoI think he means that some companies would like employees to voluntarily quit
- fragmede 2y agoEmployees quit for all sorts of reasons. When a company gets big enough, it's just resource management, like a board game. Employee attrition is getting employees to quit without firing them, which is usually cheaper for the company.
- jaggederest 2y agoA significant majority of the total wealth in the US is in real estate (~$90T of ~$150T). Most of that is residential, but about a third of it is commercial. So about 10-20% of the total wealth in the US is in the form of commercial real estate, a significant amount of which is offices or office-adjacent-services that lose value if offices are not occupied.
- euroderf 2y agoIs there a metric like PPP for real estate ? It might be a reality check for wealth vis-à-vis other nations.
- jaggederest 2y agoI think cap rates are a decent proxy for that kind of thing, and they're not too bad recently in commercial office space, as far as I can tell. It seems that office buildings are selling at a discount to what they were a few years ago. But I suspect that many buildings have not yet changed hands, and thus have debt based on their old values. I wonder how many underwater office buildings there are in the US right now, and who owns their commercial paper? Edit: looks like about half of all office mortgages are underwater. Welp, there it is.
- HeatrayEnjoyer 2y agoBut the mortgage is fixed. Bringing people back in won't change the contract.
- jaggederest 2y agoThe value of the building is as a multiplier of the net operating income, that's what a cap rate is. If people come back in and companies expand and renew their leases, that increases the value of the building and reduces the capital needed to recapitalize the mortgage. And, bringing people back in, especially in the context of e.g. Amazon with thousand of workers, also has lots of knock on effects on other businesses, and there are plenty of copycats who follow the big seven tech companies.
- neuroelectron 2y agoAmazon wants retention? That seems very strange and counter-intuitive. When did this happen?
- klodolph 2y agoI wrote that Amazon wants “attrition”, which means the opposite.
- neuroelectron 2y agoSorry I don't know how I made that mistake.
- rblatz 2y agoI’ve long suspected it’s a PR campaign/propaganda and talking points aimed directly at the c suite class. A lot of people with a lot of money stand to lose a lot. Banks, investors, retirement funds… Start circulating studies showing people working multiple remote jobs at once, steer thinking around company culture, normalize it through repetition, send out talking points. Eventually dominos will start failing.
- _zoltan_ 2y agoIf it would be bad for people's pension funds and such, shouldn't it be everyone's interest to actually keep showing up to prop up those real estate values?
- theturtle32 2y agoNo.
- bilekas 2y agoPension indexes wouldn't be in a volotile industry as real estate.
- chii 2y ago> shouldn't it be everyone's interest to actually keep showing up to prop up those real estate values? not if you're getting a large benefit from WFH. And the loss from commercial real estate devaluation won't hit everyone equally.
- InDubioProRubio 2y agoProductivity would grow the amount of value in real-estate + some i guess. Should be a little spike starting at covid where new value is generated, but old losses are not priced in.
- captainbland 2y agoPensions are, in general, well diversified. The tiny loss you'd get in your pension, diluted over decades of management, is practically homeopathic in strength as a concern.
- kitsune_ 2y agoMy theory, which is kind of informed by what I saw it play out in my company: The reason is a psychological one. Most leaders derive their power from in-person interactions. Remote and video calls severely impact that. Those leaders also love having an audience that needs to listen to them whenever they are in the room and the lack of that kind of feedback and adulation shellshocked a lot of them.
- EoinB 2y agoThis is the conclusion I have come to as well. So much of what happens in society can be best explained (imo) by human psychology and our relationship with ego, desire, perceived success etc.
- slg 2y agoIt feels a lot worse to deliver a lame joke at the start of an all hands meeting to a bunch of muted zoom windows with their cameras off. How much of the return to office is leaders wanting that polite chuckle from that captured audience back? I'm barely being facetious. "That polite chuckle" is really a stand in for all the soft power they wield in person that evaporates with WFH. They have lost a degree of control and power, it is basic human nature to look for a way to claw that back.
- sulandor 2y agonew rituals for video-calls and remote interactions are being evaluated by gamers and nerds for decades now, but the application to diversely motivated workers is difficult
- close04 2y agoI think we're looking for the unified theory of RTO. Soft power is definitely one of them. But every company and group of people have their own mix of reasons. I bet Amazon's exercise is a hidden layoff process. Other companies probably want to get their money's worth from the office buildings. The management of others wants to see the army of smiling minions that report to them. Others want to see people in the office for control (make sure they're not enjoying too long breaks, or working from the beach, or working double jobs in parallel, etc.). And some believe that people will interact better, easier if they're in physical proximity. Or a mix of this even between managers from the same company. And sometimes I think some cities push employers to get people back in office because they have no better idea how to keep those centers of activity vibrant, alive, and contributing financially. I remember reading some city authorities complaining that RTO means the death of the city center and the businesses tied to it. I don't see why there would be one reason to rule them all.
- bjornsing 2y agoI talked to an acquaintance who ran a startup that went remote during the pandemic. His view was that the self-motivated conscientious employees were just as productive remote as they were in the office, if not more. The problem was that when they left the office the people in the office became less productive. To me that makes a lot of sense and aligns well with my experience of office life. Some people depend on seeing others around them working, or they can’t get much done. I asked him if he thought it was fair that his self-motivated employees essentially had to provide this service for free to the company, and spend time commuting to do it. Don’t think he could fully grasp the question, didn’t see a problem with that at all. (This was in Sweden, which has a more collectivist work culture than the US.) EDIT: But to be honest I think there might be more truth to @kitsune_’s sibling comment.
- mgh95 2y agoI think a lot of this comes down to perception of ROI for management. If the employment market is giving you qualified candidates at the price you seek in-office, why would you expose yourself to risk? I'm in this situation now where I'm hiring early employees and looking to grow, and about 90% of the decisions is how well can I derisk this hire. I don't need elite developers; I need competent, conscientious "75%" developers. It doesn't make sense to spend time interviewing, onboarding, and hiring, just to expose myself to another risk factor. Your friend was probably not thinking "fair" or "unfair", rather, what is the employment market bringing him.
- bjornsing 2y ago> Your friend was probably not thinking "fair" or "unfair", rather, what is the employment market bringing him. In a relatively free labor market (like e.g. California’s) that perspective is fine with me, because you probably have to pay more for the conscientious “75%” developers you need. But Sweden has a heavily regulated and unionized labor market where differences in pay are typically motivated by the collectively agreed “fairness”. I can assure you that your argument would have been just as foreign for my acquaintance.
- 2y ago
- chaostheory 2y agoThere are also tax incentives. Cities like big company offices because in theory their workers would become customers of local businesses, which would not be possible with remote work. Maybe cities have been threatening to take away the tax breaks unless leadership did a RTO? It's also highly likely that this is a soft layoff, trying to delay the real layoffs in 2025
- red-iron-pine 2y agoyeah this isn't mentioned enough. cities desperate need the tax revenue and are pressing larger business -- doubly so if they're places like Texas, who offered sweetheart tax deals to businesses to attract them into the state.
- esalman 2y agoThat's too obvious of an explanation and probably the likeliest one. It is common knowledge that almost every big corp is trying to downsize now, and RTO announcement does force a lot of employees to reevaluate their situation.
- Malcolmlisk 2y agoIf we oversimplify everything, yes... it's all about prop up real estate prices. But if we want to talk about this, we need to have in mind the capital amortization. The value of every business goes up or down if their fixed capital gets old or unused. For example, if you have 100 computers and every computer costs 1000, your company has that value as capital. But if they lose value in the next years and those same computers have a value of 50 in the market, then your company's value is halved (oversimplifiying it). The same happens with buildings and offices, if they lose values the company loses value too. Forcing workers to move to the office gives value to the area and the building, and the buildings around, and that's one of the main reasons why they are forcing the back to office thing.
- acchow 2y agoAren’t most companies leasing their office space?
- Malcolmlisk 2y agoNot all, and even that, leasing is a cost in their accounts, which is good. Those companies that have huge ammounts of benefits need huge costs to maintain a propper balance.
- tonyedgecombe 2y agoIf a company leases their building (and I think most do) then the capital value is of little interest to them and won't influence these sort of decisions. The businesses that are struggling through all this are their landlords.
- otabdeveloper4 2y agoThere is no conspiracy theory here. Most people will work 4 hour work days when working remotely. (And if they're working an 8 hour work day it's because they're working two remote jobs at the same time.) "No loss of productivity" is a flat out lie.
- amjnsx 2y agoMaybe most people can get all their work done in 4 hours so sitting in an office for 8 is pointless
- otabdeveloper4 2y agoMaybe, maybe not. However, management bought 8 hours of your time and not 4 when they hired you.
- acchow 2y agoTech jobs, especially in California, usually hire you for all your time. If your work requires overtime, you work overtime without getting paid overtime. This is called an “exempt” job. So the times you’re off on the weekends doing no work is valuable to the company because you’re recharging your mind and possibly also thinking about problems subconsciously. I went to check my job offer, and it doesn’t mention anything about 40 hour weeks or 8 hour days.
- otabdeveloper4 2y agoYour "usually" is untrue, most countries have 40 hours per week enshrined into their labor laws.
- snailb 2y agoSo it's up to management to fill my time with work. If I finish my work in 4 hours, then it's not my problem.
- 2y ago
- kkfx 2y agoYou miss a part: it's not just real estate. If we WFH, we own homes, not in dense cities. If we own homes we start having maybe a shed with p.v. and storage, a homelab, which with modern FTTH connections could be a small machine room alike datacenter, which with modern tech could be a part of a decentralized network so the SME/startup instead of buying someone else resources in the cloud buy their employees resources in their home at similar rates and equal reliability but with much more balance of power and much less private censorship possible (like arbitrary PayPal and co blocking of payments for Wikileaks or porn-producers). In such setup who will rent a Waymo? Who wont a more shiny macrobug aka smartphone? Who want JustEat or Uber? We will came back quickly in a real modern "StrongTown" economy, of many SMEs fighting with their dynamism, instead of creating slaves with taxes and rents to keep people moving. We will really implement the Green New Deal because we can't in a modern dense city without rebuild it from the ground, but we can for small buildings. We re-create the middle class society instead of the neofeudal society of giants and neoproletarian poor. Real estate is the most immediate threat for the giants, but not the only.
- bryanlarsen 2y agoAmazon RTO has a very simple explanation. If Amazon fired a bunch of people they'd lose access to bringing replacements in via H-1B, EB-1, et cetera. If they chase them out via RTO, they can be replaced with H-1B's.
- jimmydddd 2y agoI think there could be legit reasons for RTO, such as improved mentoring opportunities, and developing deeper productive relationships with co-workers. I'm in my 50's and have worked fully remote for 15 years, but most of my business comes from past coworkers with whom I formed close relationships via working late nights in the office, going to happy hours, grabbing a coffee at the break room, etc. So, while I agree the companies are pursuing their own agendas, I think workers (especially young workers) could benefit from RTO.