I have posted this on Reddit (askeconomics) a while back but got no good replies. Copying it here because I don’t want to send traffic to Reddit.
What do you think?
I see a big push to take employees back to the office. I personally don’t mind either working remote or in the office, but I think big companies tend to think rationally in terms of cost/benefit and I haven’t seen a convincing explanation yet of why they are so keen to have everyone back.
If remote work was just as productive as in-person, a remote-only company could use it to be more efficient than their work-in-office competitors, so I assume there’s no conclusive evidence that this is the case. But I haven’t seen conclusive evidence of the contrary either, and I think employers would have good reason to trumpet any findings at least internally to their employees (“we’ve seen KPI so-and-so drop with everyone working from home” or “project X was severely delayed by lack of in-person coordination” wouldn’t make everyone happy to return in presence, but at least it would make a good argument for a manager to explain to their team)
Instead, all I keep hearing is inspirational wish-wash like “we value the power of working together”. Which is fine, but why are we valuing it more than the cost of office space?
On the side of employees, I often see arguments like “these companies made a big investment in offices and now they don’t want to look stupid by leaving them empty”. But all these large companies have spent billions to acquire smaller companies/products and dropped them without a second thought. I can’t believe the same companies would now be so sentimentally attached to office buildings if it made any economic sense to close them.
Like people said, a lot of companies have stake in real estate.
WeWorks, for example, was supposed to be big IPO and big payouts for these companies. And because of WFH, WeWorks is near bankruptcy with 12 cent stock.
Only way to avoid further real estate losses is to force employees back to office.
WeWork was already having problems before Covid, and WFH would actually benefit WeWork since it means more mobile staff that could use a remote office in places where they can’t find room at home.
A lot of companies get large investments from investors. Investors generally have a lot of stake in real estate.
Probably the same reason why small startups get fancy offices in the city center as soon as they get their investments, but there’s no budget for salaries.