Some corporate giants across the United States are cracking down on remote work, the clearest sign yet that the employer-employee power dynamic has shifted and some companies are eager to leverage it in order to fill their empty offices.
Within the past several months, corporate giants such as Farmers, Salesforce, Chipotle, Lyft, Disney, Snapchat and Meta have clamped down on in-office mandates. But there's also pushback: Employees at online retailer Amazon walked off the job late last month to protest an in-office mandate and asking for greater flexibility on how and where employees work. Amazon didn't immediately respond to CoStar News' requests for comment.
Silicon Valley's Google is the latest employer tightening its enforcement of in-office mandates, a move met by burgeoning optimism across the nation's commercial real estate market but opposition among some employees. After more than a year of allowing its workers to come in for three days a week, the Mountain View, California-based company warned employees that nonattendance could be used in performance reviews as many of its offices have sat largely empty.
“We’ve heard from Googlers that those who spend at least three days a week in the office feel more connected to other Googlers, and that this effect is magnified when teammates work from the same location,” Google Chief People Officer Fiona Cicconi wrote in a memo to employees sent out this week. “Of course, not everyone believes in ‘magical hallway conversations,’ but there’s no question that working together in the same room makes a positive difference.”
The move is Google's most aggressive to date in getting its workers back to a physical space. The company, one of the early adopters of a remote-work policy triggered by the pandemic's spread, started bringing employees back to the office in April 2022, but was lenient with its three-day-a-week mandate and used perks such as gourmet meals and wellness offerings to lure them back. It even hosted a private concert with Grammy award-winning Lizzo to try to celebrate everyone's return.
Fast forward a year, however, and the economy isn't as strong, companies have issued layoffs and some employer tolerance for remote-work demands has weakened. Office occupancy remains stubbornly stuck below 50 percent of pre-pandemic levels in major metropolitan areas around the country, according to data tracked by Kastle Systems.
What's more, softening demand has pushed the national office vacancy rate up even higher, according to a CoStar analysis. The broad adoption of hybrid work has solidified a lower level of space required by tenants on a per-employee basis, and national leasing volume through the first quarter of this year was stuck at about 17% below its 2015-2019 quarterly average.
No More Flex
The renewed push has led to some claims that workers invested in substantial life moves banking on the promise of a continued remote-work policy.
“I was hired as a remote worker and was promised that was the company culture moving forward,” wrote a poster who alleged to be a Farmers worker who specializes in medical claims posted on an internal social network, the Wall Street Journal reported. “This is seemingly a power move that is frankly disgusting.”
Farmers didn't respond to a request to comment from CoStar News on the post.
Only some employers are taking the stronger approach, however. For San Francisco-based Salesforce, the company is trying to appeal to its workers' altruistic values by donating to charity for each day they come into an office. The tech giant said in a statement to CoStar News that it was planning to donate $10 to local charities for every day an employee comes into offices between June 12 to 23.
Salesforce will also donate to charity for each remote employee who attends a company event during this window.
For its own remote employees, Google is trying to convince them to make a move to in-person work for the sake of their own career.
“For those who are remote and who live near a Google office, we hope you’ll consider switching to a hybrid work schedule," Cicconi asked already-approved remote workers in the memo. "Our offices are where you’ll be most connected to Google’s community.”