Video conferencing provider Zoom grew in the pandemic from a relatively unknown service provider into a verb synonymous with remote work. Now its move to join other tech companies in pushing employees back to the workplace symbolizes an ongoing shift in office use.
The San Jose, California-based software company's move to require employees living within 50 miles of their office to show up there at least two days a week, starting this month and next, comes as businesses point to research showing workers do more in the workplace.
“We believe that a structured hybrid approach — meaning employees that live near an office need to be on site two days a week to interact with their teams — is most effective for Zoom,” a company spokesperson said in a statement to CoStar News. “We’ll continue to leverage the entire Zoom platform to keep our employees and dispersed teams connected and working efficiently.”
Silicon Valley's Zoom is the latest employer tightening its enforcement of in-office mandates, a move met with optimism across the nation's commercial real estate market but drawing opposition among some employees. Within the past several months, corporate giants such as Google, Amazon, Salesforce, Snapchat and Meta have clamped down on in-person work requirements that are now viewed as being linked with a company's strong financial performance.
Full-time remote workers were found to be 18% less productive than their counterparts in the office, according to research from economists at the Massachusetts Institute of Technology and the University of California, Los Angeles.
To be clear, many tech companies are holding on to some remote work policies that provide employees with a level of flexibility that didn't exist before the pandemic. Even so, after leading the way as some of the early adopters of remote work, companies are contending with a softer economy, challenges involved in managing a dispersed workforce and the cost of maintaining real estate portfolios that can have significant portions going empty at some points in the work week.
From Virtual to Reality
For companies such as Zoom, a fully remote workforce has little benefit if they are also paying for expensive office space and compensation in the Bay Area, home to the nation's two priciest office markets, Nick Bloom, a Stanford economist who has studied hybrid work, told the New York Times.
“They’re paying for their office and hiring local people so they get no upside from being fully remote,” Bloom said. “The most surprising thing to me was they took so long to formally announce this.”
Zoom has steadily expanded its corporate footprint in San Jose since it moved into the Legacy 55 office building nearly eight years ago, according to CoStar data. The company now leases just shy of 52,200 square feet in the KBS-owned property at 55 Almaden St.
The video communications company, an employer of upward of 7,400 people, also leases space for offices in Denver, London, Sydney, Amsterdam and elsewhere around the world.
With the opening of several new offices last year, Zoom experimented with varying office-design formats to see how and where its employees preferred to work, Alana Collins, head of real estate and workplace, wrote in a company blog post. Some locations have fewer workstations to accommodate larger collaboration areas, while others have been outfitted with virtual receptionists and mobile "Zoom rooms."
Even so, the company remains committed to its bet that remote work — while not as widespread as in the early days of the pandemic — is far from disappearing.
“Hybrid work is going to stay,” Zoom CEO Eric Yuan told analysts on the company's May earnings call. “To let employees work anywhere has sort of become a fashion. It’s hard to force employees back.”