The floodgates have opened among companies demanding employees return to a complete five-day workweek as Dell Technologies joins a parade of other corporate heavyweights getting rid of pandemic-era flexibility.
The Round Rock, Texas-based company told employees it would be eliminating remote work privileges and that, starting March 3, everyone living within an hour of a Dell office will be required to commute five days per week. Workers who live further away will be allowed to stick to their current hybrid or remote schedules, but for everyone else, the tech giant's offices will soon get a lot busier.
"We are retiring the hybrid policy effective that day," CEO Michael Dell wrote in an email to employees announcing the March mandate. "What we're finding is that for all the technology in the world, nothing is faster than the speed of human interaction. A thirty-second conversation can replace an email back-and-forth that goes on for hours or even days."
All future roles will be hired for a specific Dell office, the company told employees, and remote setups will no longer be offered. What's more, for workers that continue to operate away from an office, they would need to secure approval from Dell's senior leadership in order to be eligible for a promotion, according to an internal memo earlier reported by Business Insider.
Beyond its Texas headquarters, the computer hardware company leases or owns nearly 170 offices around the world, according to CoStar data, a footprint that spans upward of 8.3 million square feet.
New year, more 'energy'
The forthcoming requirement is the company's latest and likely final step in returning to a more normalized pre-pandemic schedule. Earlier last year it told some of its employees that they must show up to a corporate hub at least 39 days a quarter, a mandate that shook out to roughly three days a week for workers that had previously been operating on a hybrid basis.
Departments such as sales, manufacturing, lab engineers and various leadership roles were then asked in September to return for all five days of the week.
Vivek Mohindra, Dell's senior vice president of corporate strategy, said several months later that the company had seen "huge benefits" from bringing various teams back to the office, and that the energy had been "very different" since the policy was introduced.
The company's CEO added in his recent memo that the tech giant "now [wants] to see that same sense of urgency and drive everywhere."
Remote no more
Office market stakeholders across the country are watching carefully as corporate heavyweights such as Amazon, JPMorgan Chase, Starbucks, AT&T, Southwest Airlines and Walmart have recently stepped up their in-person requirements, with many employers are now demanding workers commute to an office all five days of the workweek.
While remote work has dealt some long-term blows to tenant demand and leases, landlords such as BXP, Kilroy Realty and Hudson Pacific Properties have said companies are now reevaluating their real estate footprints, and escalated mandates will likely trigger a boost in demand after years of arrested leasing activity.
The combination of depressed demand, stagnant leasing and ongoing flexible work helped push the national office vacancy rate to a record high of about 14%, according to CoStar data. Tenants have collectively handed back roughly 210 million square feet of office space since the start of 2020, and those in the market for new space are often signing deals that average about 20% smaller than those in the years before the pandemic.
Companies such as Amazon and AT&T are already running into logistical challenges associated with calling their employees back to the office full time, running into issues such as parking shortages, desk shortages — as a major boost to broker and landlord optimism — not enough real estate.
Amazon has postponed its return date for employees in some markets because of the lack of adequate office space. Earlier this month it signed a more than 50,300-square-foot lease for a new office in Miami's Wynwood Plaza, marking the largest deal to be signed in the neighborhood as well as kicking off what is expected to be a string of similar expansions.
Dell appears to have the capacity necessary for all of its workers to return next month but will provide guidance for impacted employees if space at a particular location is limited.
“We continually evolve our business so we're set up to deliver the best innovation, value and service to our customers and partners,” a Dell spokesperson told CoStar News. “That includes more in-person connections to drive market leadership.”