Work-from-Home Unleashes Nightmare for Office Landlords & Surrounding Businesses. Global Banks at the Forefront

“There will be a long-term adjustment in how we think about our location strategy…the notion of putting 7,000 people in a building may be a thing of the past”: Barclays CEO. And companies are following through.

By Nick Corbishley, for WOLF STREET:

This appears to be an increasingly global phenomenon. Roughly 60% of bank executives in the US said they don’t expect all of their employees to return to the office. And over 40% said they plan to reduce their real estate footprint in response to the coronavirus pandemic, according to a survey of US bank executives by Accenture Plc.

Some banks are already making long-term changes. In Midtown Manhattan, French megabank BNP Paribas renewed its lease at the 787 Seventh Avenue tower. But it shrank its footprint by 38%: According to the Commercial Observer, instead of renewing the lease for the 454,200 it currently occupies at the building, it signed a lease for only 280,000 square feet.

In London, large financial institutions are the biggest tenants of the toniest commercial real estate. And they are now seriously reevaluating not only how much workspace they require but what sort of form it should take. Even allowing for physical distancing measures, such as the separation of desks, most companies now have a lot more office space than they think they’ll need, especially if they end up laying off large numbers of workers when the government’s job retention scheme comes to an end, which is scheduled to happen in September.

Goldman Sachs and Nomura said over the weekend that they plan to send only 10% of their UK workforce back to their City of London offices.

Last week, the 30 biggest employers in the City of London said they only intend to bring 20-40% of their workforce back in the coming months.

One of the UK’s “Big Four” banks, RBS (which was renamed “Natwest” today in yet another re-branding exercise for the scandal-tarnished lender) announced that close to 50,000 of its 63,000 workers will continue working from home, at least for the rest of this year.

“Like we’ve done throughout the pandemic the decision has been made carefully, including considering the latest guidance from the UK Government on Friday and our own health and safety standards and procedures,” said a spokesman for RBS. “It’s a cautious approach but we feel the right one to take currently.”

“Work from home if you can.” That was the blanket message the UK government sent out to all non-essential workers during the darkest days of the Covid-induced lockdown. Now that the lockdown is easing, the government is frantically trying to reverse the trend toward working from home, which it itself set in motion and which is unleashing myriad negative impacts across the economy. It has even relaxed the safe distance rules from two meters to “one-meter plus.”

That the British government can’t even persuade RBS — which is still 63% owned by the British State following the bailout during the Financial Crisis — to get its workers back into the office does not augur well for its efforts to halt or reverse the trend toward home working.

By now, 49% of all UK workers are working from home, up from 5% just before the lockdown. With the novel coronavirus still doing the rounds, many of them are skittish about venturing back into the office. Some seem to be quite happy toiling from the relative comfort of their own home and no longer having to commute.

Others are raring to get back behind their desks and away from their stultifying home-bound existence. According to a survey by global financial services firm Jefferies, 61% of more than 1,500 UK respondents said they would return to work immediately if they could.

As for their employers, many of them seem to be quite pleased with the results thus far of the mass remote working experiment, especially as they glimpse the possibility of saving millions in rent. Some startups have already got rid of their offices altogether.

Many companies are not just planning to pay less rent and reduce their office size, they’re also looking to move to buildings where they can better control the work environment and safeguard their employees’ health.

“There will be a long-term adjustment in how we think about our location strategy…the notion of putting 7,000 people in a building may be a thing of the past,” Barclays CEO Jes Staley said in late April, back in the early days of the UK’s lockdown. One possible solution under consideration is to move investment bankers and other back-office staff into branches, Staley said at the time.

The prospect of a mass exodus of large corporate tenants from landmark buildings terrifies major commercial property owners. It also worries their creditors, which, ironically, include big banks such as Barclays and RBS. According to public filings, the UK’s Big Four, which are rounded out by HSBC and Lloyds, had £49 billion in outstanding U.K. commercial real estate loans at the end of 2019.

The cracks are already beginning to show. According to the latest edition of CBRE’s Central London Office View, take up of new office space in Central London slumped to 1.1 million sq ft, a decline of 66% from the 10-year quarterly average. Availability continues to increase in the City as a whole, rising by 18% year-on-year in the second quarter, while the vacancy rate rose from 5.4% to 6.5%. In Central London, the vacancy rate rose to 5.3%, from 4.4% at the end of Q1, the highest level since 2010.

Non payment of rents is also on the rise. According to research by Remit Consulting, only 53% of office rents were paid on the June quarter day and 12% was still outstanding from the March quarter day. Ominously, large tenants are demanding concessions from their landlords more than smaller tenants.

As non-payment of rents rises and rental income slides, the value of the underlying properties will inevitably fall. The UK’s Treasury watchdog, the Office for Budget Responsibility (OBR), warned that the price of offices and commercial buildings could fall by as much as 14% this year while transactions are expected to slump by close to a quarter.

The whirlwind of the shift to work-from-home is hitting businesses such as cafes, restaurants, bars, hair salons, retailers, and the like, plus transportation and travel sectors that are dependent on these customers that used to work in offices. Now that many of those office workers are either opting or being forced to work from home, those businesses face a barren future, as do the owners of the real estate they occupy. By Nick Corbishley, for WOLF STREET.

PE firms sit on lots of cash but won’t invest it in their stripped-bare and failing restaurant chains. Read… As the Biggest Restaurant Chains in the UK Fall into Bankruptcy, Attention Turns to KKR & Other PE Firms that Own Them

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  118 comments for “Work-from-Home Unleashes Nightmare for Office Landlords & Surrounding Businesses. Global Banks at the Forefront

  1. Old Engineer says:

    It’s like returning to the early 1800s in England where the spinning, dying, and weaving of wool was carried out by people working in their own homes. Computers and the internet are returning us to a pre-industrial revolution work location paradigm.

    • JoAnn Leichliter says:

      Interesting point, for sure.

    • Clete says:

      Along with the idea that many people work for themselves at two or three occupations (Uber driver, web builder, etc.).

    • c1ue says:

      And this is an improvement?
      The 1800s also saw the mass deployment of the “putting out” system – where the spinners were literally sharecroppers since they both had to borrow to get their equipment (spinning machines) and had prices of both input and output (raw cotton in, thread out) set by the lenders.
      As Wolf has mentioned before: once you prove a job can be done remotely – it can be moved to India, Phillipines, etc just as easily from New York/SF to Peoria.

    • Eric says:

      I have always thought like that…

    • Leave a Reply says:

      And the Jacquard loom led directly to computer technology. That’s quite a circle.

      https://www.youtube.com/watch?v=MQzpLLhN0fY

      • c1ue says:

        The loom isn’t the issue: the economic and legal wrapping around it is.
        The “putting out” system isn’t even original: it is simply a transplant of standard feudal practices to a specific industry.

  2. MonkeyBusiness says:

    WeWork will soon turn into WeDontWork.

    • Scott says:

      Now that’s funny!! :)

    • happy_man says:

      “Work From Home” = “Easy to Lay Off”

      • MonkeyBusiness says:

        Depends on how many are doing it?

        Also, we are probably closer to the end of the debt cycle than not, so there will be a ton of bankruptcies in the future. Either way, demand for offices will go down.

        • happy_man says:

          You may be shocked when you understood how disposable employees are. Especially expensive ones (>$15k/year)

        • MonkeyBusiness says:

          No doubt. After all most of what we do are optional. Do we need to trade derivatives every day? No. Do we need to watch stupid TikTok videos? No. We spend most of our lives doing stupid s***. Once the global economy is reset, only farmers will have job security.

          Billionaires don’t need jobs, so they don’t need job security.

        • intosh says:

          @MonkeyBusiness

          Coincidentally, I’ve just read an article this evening titled:

          “Too Many Jobs Feel Meaningless Because They Are”

          https://getpocket.com/explore/item/too-many-jobs-feel-meaningless-because-they-are

          “In a 2013 essay, [David Graeber of the London School of Economics] made the seemingly bizarre assertion that perhaps as many as 30 percent of all jobs actually contribute nothing of use to society. […] Graeber says he has been contacted by hundreds of people saying they agree — they work in pointless jobs which could be eliminated with absolutely no loss to society — and they’ve come mostly from human resources, public relations, lobbying or telemarketing, or in finance and banking, consulting, management and corporate law.”

    • c1ue says:

      Hasn’t that always been the case?

  3. KamikazeShaman says:

    Office work, hair-do joints, “rogue drinking establishments” and business trips will come back in due time. Enough with the extreme “absolut new normal” visionary propaganda.

    People are gonna be zoom’d out eventually. And for good g’damn reason. It’s a second rate way of experiencing the world.

    • Wolf Richter says:

      I’ve worked from home for over a decade. It’s great. The bad thing is you never have off. You’re always at work, and you have the worst tyrant as a boss: yourself :-]

      • motorcycle guy says:

        Wolf,

        I left a large investment firm (Prudential Bache) for a broker/dealer based in Dallas TX in 1991 and worked from home for the next 23 years. I liked the change also.

      • c1ue says:

        @Wolf
        I’m assuming, however, that you aren’t saying that everyone can become a blogger/independently wealthy trader/consultant – or whatever it is you make income from?
        Unlike the “learn to code” method of poverty uplift morons.

        • Wolf Richter says:

          c1ue,

          I should write an article about working from home.

          If you don’t like what you’re doing, there are real issues with WFH. It’s very hard to keep motivated working by yourself at home when you don’t care about what you’re doing, of if you dislike it. And then it takes a huge amount of discipline every minute of the working day to just keep plugging.

          If you’re passionate about your work, and you love it, and you wake up at 4:30 a.m. because you no longer want to waste time lying in bed but want to plunge into the exciting pleasures of your work, then WFH is a blast. And that’s the case with what I’m doing (running my WOLF STREET media mogul empire).

        • c1ue says:

          @Wolf
          Please do.
          I do think that WFH, or blogging, or whatever can work for any particular individual.
          My point was simply that this type of activity does not scale across an entire economy.
          This type of activity is also significantly, if not largely, a factor in the real world production side. Somebody has to make the routers, the computers, the cell phones, the food, the cars, the household appliances etc which we are all using.
          The sad state of America today is the deprecation of this type of work in favor of the managers, the financial scammers/wizards, the PR/marketing flacks and what not.

        • sunny129 says:

          People who really LOVE their work/jobs are very few. Those are musicians, painters who get the ‘FLOW’ while working ( forget about the time and outside world!)

          I get it When I am reading, posting comments, positional trading during day time and while watching (downloaded) movies ( sort of decompression for my brain) in the night times. Since I am retired almost 15 yrs ago, this was a kind of gift!

          Reading was everything to me ( information, entertain, to be challenged by ideas++) while I was young!

          Either you get it or you don’t!

      • Lisa_Hooker says:

        Wolf you are more than right. The topics/problems that you are working nag your mind. Even during dinner. And the office and keyboard are only a few steps away. It’s very very hard to not scratch that itch and put it off until tomorrow. Cost me a couple of prospective marriages.

        • Wolf Richter says:

          Lisa_Hooker,

          Sorry to hear about WFH costing you “a couple of prospective marriages.”

          I’ve been married for a couple of decades now, very happily, and I do focus entirely on my wife during dinner, which we eat together. I listen to what she says, stare into her eyes and marvel at her beauty, so that she can see the little red hearts sparkling in my eyes.

          But I get the impression that, after 20 years of marriage, she is otherwise fairly happy to not be bothered too often by her man 🤣

    • roddy6667 says:

      In China, all that normal activity was back a couple of months ago. People still wear masks a lot, but that is a Chinese thing. China did a massive, complete shutdown and stay-at-home starting in February and stopped the pandemic in its tracks. That’s what has to be done, and Americans are not capable of that. Everybody has an app in their phone that allows anybody who has been exposed to be tracked down and sent for testing. This has been very helpful.

      • Coca Cola says:

        Please show data.

        • MiTurn says:

          The data couldn’t be trusted anyhow. China is a black hole when it comes to such things. For example, Sweden is about to pass China for total number if Covid-19 cases.

        • roddy6667 says:

          I don’t use data. I have been living in China for 7 years. I just flew to LAX on Sunday and drove cross country to CT. Americans are doing all the wrong things. The pandemic will not end in the US for a long time.

      • Bobby Dale says:

        Correction:
        Please show data that is not provided by Luckin Coffee

      • Satya Mardelli says:

        Our system of government precludes us from having a national mandate. We have states rights. Our federal government could only issue recommendations and guidelines.
        Taiwan, South Korea, China , et al issued national mandates and it worked.
        Lessons learned.

        • Coca Cola says:

          Be glad we have states rights or else the whole country could look like Provo or Seattle or Detroit….

        • Jon says:

          The lessons are far from over, and those that give up liberty for security deserve neither.

        • Lisa_Hooker says:

          “Our federal government could only issue recommendations and guidelines.” … and WITHHOLD MONEY.

    • Implicit says:

      Black markets matter!
      There is no way to take that the wrong way.

  4. Stephen says:

    There are not many good things that have come out of the entire Covid situation, but WFH is one of them. Of course, it was only a matter of time before a new generation of mangers emerged that would embrace remote work. Unfortunately, there are still many older boomer managers that have not jumped the cultural/mental gap of working remotely. Btw, I am in my 60’s, so I am definitely a boomer. As an IT manager, I have worked with global teams for some years, so the idea of ‘remote’ is very common place to me. Also, no problem with work performance – if someone does not deliver or does not deliver quality work, it’s pretty obvious whether you are at home or at a work place.

    I spent many years in the earlier part of my career commuting through heavy traffic for several hours per day, so I knew there would come a day when companies would embrace much lower office space costs and and much lower commuting and safety costs for some of their employees. The WFH thing just needed a powerful kick in the rear – delivered by the Covid situation.

  5. Apple says:

    Mgmt at my company is adamant that there will be no permanent work from home. As soon as it is practical, they want everyone back into the open concept office ( probably after Labor Day ).

    • RightNYer says:

      Yeah a lot of companies say that, but when their good employees all start to hand in resignation notices to go to more flexible employers, they’ll change their tune very quickly.

    • Lisa_Hooker says:

      Apple, they are going to find that they are going to have to pay more to get everyone back and keep them. Will they ante up or lose to their competitors? There comes a time when ego is too expensive.

      • Candyman says:

        And a time when wf h will experience pay cuts. Perhaps a premium will be paid for commuters? I know some firms in Boston pay higher salaries to people who work in Boston rather than Springfield Ma.

    • intosh says:

      Many who really hope that employees go back to the office soon are managers. The main reason for that is insecurity, which is two fold: 1) they want to “see” their employees working — they don’t totally trust them; 2) they want to be seen working (e.g. going to half a dozen meetings a day gives the appearance of being busy; while doing half a dozen Zoom meetings from home that yield very little tangible output doesn’t).

  6. leanfire_Queen says:

    This is the third year I’ve been working from home. Who cares about the GDP? It doesn’t capture that nothing offered me the flexibility and efficiency that working from home gives me.

    Sure, I don’t need to waste $ on working clothes, commuting, eating out. But who wants to be forced to spend on that or to put time on those things?

    We need better economic progress measurements at this point.

    Imho massive asset inequality has a silver lining when we are faced with bubbles crashing: when assets are so concentrated at the top, who cares if they crash? Very few will be affected.

    • MJ says:

      What about the restaurants and cafes that depend on people eating lunch out during the work day? Lots of service people, cleaning staff out of work. And people who come in after hours to clean the buildings?
      No work from home for them.

      • Coca Cola says:

        Don’t forget the wholesalers that supply all of these establishments.

      • Lisa_Hooker says:

        Ah, the arrival of maid service and the cleaning lady to your home. Cheaper than what you spend on commuting and lunches.

      • intosh says:

        They can transition into catering businesses, delivery services, house cleaning businesses.

        We can’t just keep the old ways only for the sake (artificial) of maintaining the old jobs. If we did, we’d still be using manual telephone switchboards.

  7. njbr says:

    The old Soviet joke…

    We pretend we work–they pretend to pay us.

    Work from home? For a company, if they truly set up to work from home, what is the difference if the home is in NYC, Bangalore, Haiti, South Africa, Manila, Ho Chi Minh City, Kinshasa, Timbuktu….you get my point.

    Look out below.

    • Implicit says:

      It does help to be able to talk to someone that understands your local needs, whether by phone, computer or in person sometimes.
      The subtle innuendos of proximity relieves some anxiety by knowing they understand your needs, cause they are locally and/or regionally involved.
      It is much better than talking with someone that you barely understand who says his name is Jack.

    • char says:

      WFH is not 10% WFH. If you have one face2face meeting a month than most of those places are impossible

    • intosh says:

      Some jobs are timezone critical.

      And trust me, companies didn’t need COVID-19 to realize they could replace a given local employee with someone in another continent, if there was really such a possibility.

  8. Buzz says:

    Phila t v station whyy ran a column last week on its on line site they want sports team and employers to pay for people working from home . Make up for missed tax revenues. My wife is a billing manager for meddstar in Maryland. She loves working from home. Worked in a office her entire life. At least she goes 4 times a month into the office.

  9. Paul Franchie says:

    I just don’t buy it. Seriously. The work from home that’s being done is a bridge until the lights go back on. How can you bring on board new people and mix them into your corporate culture. Influencing people to help you on major projects requires physical presence – lunches together – the beer after work. The new person who sits in with the group and gets trained. This all sounds just so very 2000 dot.com “new era”…

    • KamikazeShaman says:

      Nail’d it

    • Paradan says:

      I think the culture thing is important to. This is more short term parasitism, creative destruction, etc. It only works because of previous long term effort has a residual effect.

    • Gerrard White says:

      @Paul Franchie

      Those People who work from home are very easily disposable

      One of the essential ingredients of work is active collaboration – Steve Jobs designed the workplace for his company with this in mind, to bring workers together to mix divisions and departments even high and low not seperate out the executive suite, canteen etc so that….well the rest is history now I guess

    • Torsten says:

      Indeed, you are right, somewhat. However, the movement of billions of people per day around the globe just to come “to their workplace” produces a lot of pollution (including CO2) and stresses the infrastruktur of the cities.
      I agree that not ALL will be “new era”, but a kind of decentralization and “flexible working” where more or less half of the staff is “out” for some days of the week might be not so far on horizon. Anyway, the effect on the businesses as described here in the article will be felt.

    • Mike says:

      Nope. In a large company the culture thing is only in your own circle of work colleagues that you see regularly in person on via Webex etc.

      In my company culture on other floors or in other buildings is totally different. I’m a boomer and WFH is going to stay but with maybe a day in the office once or twice a month to check in.

    • Coca Cola says:

      My wife and I are currently wfh. We have a three year old and it’s next to impossible to get anything done.

      • intosh says:

        @Coca Cola

        “My wife and I are currently wfh. We have a three year old and it’s next to impossible to get anything done.”

        And going to the office is a false solution. If you both go back to the office, you’d have to have someone take care of your child. If someone else is taking care of your kid, then you can work from home.

    • intosh says:

      See Automattic as an example.

      A company that is really serious about their “corporate culture” will find a way to inject that to all employees, even remote ones. Lunches and beers are overrated. It is about how you treat people and colleagues day-to-day. Period.

      But yeah, influencing people to do the job for you may be a bit harder to do remotely.

    • Zammo says:

      I agree.

      We are WFH effectively because we have been afforded years of working and socialising after work together.

      When companies start to see churn and brand new teams are built remotely I envisage a lot of that being lost.

      Some of the best innovation happens because of curiosity. It’s difficult to be curious and ask potentially stupid questions if you have a purely remote business relationship with your team. It’s not impossible but it will take much longer to feel comfortable doing.

  10. John says:

    If you can work at home in America or Europe, the job can also be done in third crap holes like India or the Philippines.
    Will you still be in favour of home working, when it’s your job thats offshore?

    • Gerrard White says:

      @John

      Exactly – offshoring proved less than fabulous when it came to industrial skills and plants and logistics disruptions of a lot of ‘essential’ products

      It will be a great deal worse when office work is offshored and/or softwared

      Those enjoying their home clothes and no commute will soon have nothing else to enjoy

    • Prof. Emeritus says:

      That’s what Boeing was thinking when they outsourced the 737 MAX software development. Work from home does not equal work without expertise, experience and knowledge.

    • Yertrippin says:

      “crap holes”

      Classy.

      • Javert Chip says:

        …but accurate.

        (Very education to visit one of those places (or Cuba, if you get a chance).

        • Yertrippin says:

          I spent over 15 years traveling and working in these countries and others labeled with such thoughtless ease thank you very much.

          It was an education that that me that there are no “crap holes” only “***holes” running them.

    • intosh says:

      What you said was true pre-COVID-19 anyway. Nothing new.

      Companies already looked at whether your position could be filled in “crap holes”. Working from home changes nothing to the equation. They have opted to hire locally due to financial reason (e.g. subsidies), talent, timezone, culture, strategic proximity, etc., NOT because you can be physically present in the office 5 days a week.

    • Dave says:

      @John: So how did that work out for Boeing?
      Several hundred dead people and many Billions of dollars in lost revenue.
      Yeah, they sure saved a lot of money hiring those foreign workers with the fake college degrees to write the 737 software.

      Good job. I bet the executives got a big bonus for that one.

  11. Anthony A. says:

    Every job I ever had was one that had to be done in a manufacturing plant, oilfield or client’s physical location. I’m an engineer with an MBA in finance (which was useful, but not necessary).

    I can’t fathom what all these folks are doing when working at home? Do all of them have their faces stuck in a computer screen for 8 hours? Or on the phone making cold sales calls? Or filling out forms or reviewing applications? Maybe I am a luddite, but I see this move as ending badly for a lot of work at home employees once management in conjunction with their efficiency consultants figure out how to combine/eliminate work efforts or move them oversees for way less money. This is just nuts.

    • Jeremy Wolff says:

      I’m not sure there is any difference in terms of what you are talking about with working from home and working at the office. 8 hours of computer screens.

      Even in the content is interesting to the worker, like law or design or even, god help their souls, the accountants, it seems very sad for any of this work to have be conducted in two dimensions in a beautiful three dimensional world.

      • Jeremy Wolff says:

        And as far as Wolf is concerned, my hope is that he balances his computer time with free time. His graphs are amazing. Otherwise, as I appreciate the work of my accountant and lawyer, I appreciate your work very much.

    • CZ says:

      Yes, many office workers do virtually all their work on computers. I can’t think of a single work-related thing I did in the office that I can’t do from home. In person meetings can be more efficient than Zoom; on the other hand, with Zoom, I can have the game or Bloomberg on in the background.

      That said, if you like your team, it’s a lot more motivating, energizing, and fun to be in the office.

      If you hate your team, working from home is a blessing.

    • JoAnn Leichliter says:

      I think the work from home model will work extremely well for some businesses and not so well for others. Probably many businesses will still require employees who work from home to be physically present on secheduled occasions. Over time, we may see cities dwindle and small towns or suburbs experience a renaissance. Even people working from home will eat out, get haircuts and styling. Locations may change and demand vary, but there can be good effects as well as negative, as with all paradigm shifts.

    • Mj says:

      Let’s move the corporate squeeze-em-dry class overseas and keep more jobs here in the US for everybody else!

    • Mj says:

      Wait to see about work from home in all levels of education field. What may be good for teachers may not be for students and vice-versa. Staff, too. Can see some flex time being available but not off-site altogether. Here in Rhode Island a permanent change is going to be the end of “snow days!” And, lower-income families will have access to computers.

    • LT says:

      I’m an engineer with an MBA as well, and I am one of those that has been working from home. I work with cost estimating and proposal development so there has been virtually no impact to my ability to perform. I average 3-5 tele-conferences a day with multiple phone calls and instant message conversations thrown in. For the most part I feel the WFH communication options mentioned above, forces employees to be more succinct. I rather enjoy working from home, but would prefer a day each week in the office. I miss some of the office dynamic and hope it doesn’t disappear indefinitely.

  12. JV says:

    If we have the vaccine by Xmas as promised, this will all soon be over and these problems will soon be forgotten as we move on to bigger and better things, nicht wahr?
    Landlords will look back upon this and laugh.
    Or am I being too optimistic?

    • DeerInHeadlights says:

      Vaccine by Christmas?

      Bwahahahaha….*breath*…bwahahahahaha….*sigh*…hahahaha

    • Stan Sexton says:

      In that vaccine will be your microchip.

    • Freedomnowandhow says:

      I’m thinking not as many odd people are going to refuse the vaccine, personal right’s they say, and tracing will keep many from the office. A person can be in quarenteen and work from home. Perhaps 3 years from know the viruses effect won’t be as obvious as today, then again business and corporations don’t change protacol back very fast.

    • TonTon says:

      It’s kind of funny when you say ‘have the vaccine by xmas’. This is pretty much the sentiment of the markets also. It kind of reminds me of the sentiment at the start of the first World War, ‘it’ll be over by Christmas,’ ( I appreciate this could be intentional :) ).
      I wonder if we are in a similar situation to back then.
      I think the virus fear is way overblown but I think the economic fear could be way underblown.

      • Torsten says:

        You should see the virus crisis as an accelerator of things … many of what we see now was already in movement, however, now at a kind of ultrasonic speed. What might have taken 10 years before the Corona crisis will now take 1 year only. Critical situations accelerate changes, but they don´t quit them, even when situation gets again to normal.

    • Frederick says:

      Vaccine by Xmas as promised? I don’t think they can promise anything And I’m not sure it would be safe anyway so who is going to step up and volunteer? Oh right millions of sheep

    • Wolf Richter says:

      JV,

      The landlords I know don’t feel that way.

      • Lisa_Hooker says:

        The only landlords I see laughing in the moderate future are those that have extremely favorable bankruptcies.

    • robt says:

      What good will Covid-19 vaccine be against Covid-20, and subsequently Covid-xx?
      The bureaucrats and apparatchiks, now that they have been granted the power, will never give it up. That’s why the public is being conditioned with the ‘new normal’ catchphrase.

      • c_heale says:

        Doubt they will have any power, because imo the current industrial society is going to collapse. Covid was just the catalyst. Peak oil (conventional and unconventional) was in 2018.

        • Dave Chapman says:

          Conventional Oil peaked in 2008, AFAIK.
          The government statistics agencies simply redefined “oil”, so as to not frighten the horses.

  13. Javert Chip says:

    My view as a (retired) senior manager:

    Having a corporate team with years of experience working together in an office imparts all kinds of tribal knowledge, and provides infinite casual networking opportunities.

    A workforce with this history probably can work more productively at home…episodically & for a limited period of time.

    The more an individual is involved in leadership (not simple supervision), creativity (including ad hoc bull sessions), mentoring, developing & managing corporate IP, and general “shaping of corporate culture”, the quicker I’d expect the skills to atrophy. Once those “team”skills are gone, you’re left with hundreds of people unproductively struggling to re-invent the same wheel (eg: dealing with the new Microsoft Office or OS upgrade).

    Sitting at home in pajamas all day in front of a ZOOM screen seems an awkward way to absorb or transmit corporate culture, or evaluate work ethic.

    Certain tasks (call centers, tech support, travel agents and the like) are already targets of outsourcing and home work.

    There may be some new, wonderfully productive way forward, but human beings are tribal animals, and it’s extremely hard work forming successful focused & effective tribes.

    • Latifundius says:

      I really like this comment (personally not retired, just 20 years in the business in mid-senior level).
      WFH is an emergency bridge, but probably not the way forward. Most of our team could do 1-2 days WFH easily instead of the official 5 days in the office, and this will a huge change and beneficial for most. But 2-3 days per week in the office will be needed to keep the team together.

    • Prof. Emeritus says:

      This will seem like a very millennial comment, but: videogames. There are IT people using it for team building or even as a job interview task to benchmark and develop co-operation between team members. The multiplayer game lobby room can replace the physical career fair and collective free time activities as long as the manager does not care how well-groomed the new intern girl is.

      • c1ue says:

        Yes, because social media shows just how inclusive and team-building online interaction is.

    • Delete from employee; says:

      Corporate culture = brainwashing. Try bullshit bingo, to stay awake in mindless endless meetings about nothing.

    • intosh says:

      “unproductively struggling to re-invent the same wheel (eg: dealing with the new Microsoft Office or OS upgrade).”

      In the office: bugging your colleagues on how to fix said broken upgrade, then call IT.

      At home: trying to figure it out yourself, then call IT.

      Remote work is at the same stage as online shopping 20 years ago or content streaming 15 years ago. Some people can’t envision that future yet.

    • intosh says:

      Some people make the all-too-common mistake of seeing this as an “all or nothing” proposition, but it is obviously not.

      Many creative and innovative companies with a remote workforce provides their employees with access to shared office space. If a team feels the need to meet, they book an office. Meetings under these circumstances are actually more productive because it’s well-planned in advanced and the attendees understand that they all took the time to commute and meet, so they tend to avoid wasting time.

      “Tribal knowledge” does not require colleagues to be physically close to one another five days a week.

    • ray says:

      I fundamentally disagree. I’ve worked from home with a team for four years, many of whom I never met. We are constantly chatting, having fun and getting a boat load of work done. I worked at places where sitting at your desk for 8 hours or having coffee with management was more likely to get you promoted than doing a good job. WFH exposes these useless ladder climbers

    • Stephen C. says:

      Seems odd. We humans are supposedly tribal, but it takes so much work to focus said tribes and get them to work well together. Then the various tribe go out to compete with other tribes, and things get messy again. It call to mind many questions. For example, what is it about tribes that appeals to all these naturally inefficient people? Are we forced into picking a tribe by the small group of people who need to play big chief and love to make war against other tribes? Has organizing into tribes advanced the species or does it hold us back?

  14. Nicko2 says:

    Well good news. There is a shortage of affordable housing. Just this morning, story in the Guardian, UK landlords are transforming now empty offices into affordable ‘micro-apartments’, some as small as a parking space. At least city centres will be lively. Imagine the old walled city of Kowloon, or the cityscapes in Bladerunner…. we’re getting closer. — not necessarily a bad thing if they’re smartly designed – American-style suburbs are incredibly environmentally destructive.

    • Mj says:

      Marshall McLuhan, tech prophet “the higher the tech, the higher the touch.”
      Not just in person time, but handshakes.
      We aren’t robots.

    • Stephen C. says:

      How does that make them safe from Covid and the next viruses that are coming down the pike? IMHO “smartly designed” is doing a lot of work in that sentence.

  15. Whatever one may say, these are our realities …

  16. Anthony says:

    The good thing, is I can work from my holiday home in the South of France instead of my normal Manchester UK home. It’s a tough life but someone has to live it….

    • Zammo says:

      I briefly looked into this (I work in London). I got the impression it has tax and employment law issues if you work abroad for your UK employer (assuming you declare your work – you may well be doing it in secrecy).

      What is your experience in this regard?

  17. njbr says:

    It was a delusion when the big guy said it, “Only I can do it !”.

    Virtually every other person who says ,”Only I can do it !”, is just as delusional.

    Imagine a time period when your supervisor has you shadowed virtually by your $100/day replacement.

    One day, you go to your company internet access and see “Access denied”.

    Proximity is power.

    • c1ue says:

      I think ypu mean “Proximity is Security”
      But I think it isn’t even that. My wife managed to get hired right before the COVID-19 lockdown but wasn’t able to start until a brief window opened, a month later.
      The role she was filling – the person there had been with that company for 16 years and had been doing pretty much everything. The institutional knowledge this person had was fantastic. Yet my wife, with a little coaching, was hired for at least 30% more than this departed person was getting paid.

  18. Just Some Random Guy says:

    I’m not fully convinced long term WFH will be a thing for everyone. For tech related work, sure. You can do that no matter where you are. But for more traditional work, the boss man will want you back in that cube for 40 hours eventually.

    • VintageVNvet says:

      NOT always randyguy:
      Some of us who have been working at home for decades have done so by proving very clearly that by doing so we are actually more ”cost efficient” or however one might want to describe the situation where, in office, with the customary and usual interruptions we can do 10 whatevers per day, as opposed to away from office we can do 20 or more…
      With a cooperative spouse who understands not to interrupt when one is at desk or drawing board or computer, whatever, it has been very clear to me and several of my former employers/clients that it is far more beneficial for them cost wise.
      Certainly depends immensely on the work one does, and especially on the expertise one brings to that work, etc., etc. In my case, at the end of my career, clearly doing the work of 6 or more at the beginning due to computer efficiencies, there was very little doubt or confusion about this with equally competent employers/clients; may be somewhat more difficult to determine going forward, but IMO it will be clear… and to be sure, there was no way anyone far away could do my work anywhere near equally.

  19. Lisa_Hooker says:

    In 12 years of employment with a local Fortune 50 company I just calculated that I spent almost 2 years worth of 8 hour days just driving to and from work. 45 minutes each way. Would I want to waste that kind of time again? No.

    The only resource you truly possess is your time.
    It take some folks a long time to understand that.

    • Nate says:

      Yep. And how you spend/ invest your time is the payoff of a good and/or interesting life.

      Glad investing my time on here makes my life more interesting.
      Thanks Wolf. ;-)

    • intosh says:

      Exactly.

      Saving an average of 2 hours/day, 10 hours/week. That is HUGE. I really can’t see why anyone, if offered the choice, would choose to lose 10 hours a week. “Corporate culture” (“team spirit” is more apt) can be fostered with once in a while get-together. Daily coffee breaks or lunch with your colleagues? Maybe I’m not social enough but I won’t miss that if I get 2 hours back every day.

  20. Jason says:

    TIMELINE

    1) Pandemic triggers mass layoffs, uncertainty is the New Normal. Capital and trade flows disrupted.

    2) High-cost small businesses fold, money velocity collapses as savings soar.

    3) Zombie corporations rush to borrow billions but this only delays their insolvency

    4) Service sector dependent on top 5% household spending implodes, tech/managerial class layoffs surprise Protected Class

    5) State and local taxes plummet, Federal bailouts run out, local government employment slashed

    6) Defaults and bankruptcies explode higher, triggering catastrophic losses in banking and derivatives

    7) “Safe” sectors crushed: tech, healthcare, higher education, finance – – – NO SAFE HAVENS LEFT

    Guns. Garden. Gold.

  21. Ian says:

    Safe guarding the employees health, oh pleeeese. Apart from the fact that the CEOs who now find they can have most people at home should be fired for not thinking of it before, this is now the strategy. And the next step will be – well if they can work from home here, they can work from home a lot cheaper in India and no pesky visas to worry about. If the lockdown was ever required to protect an sge group predominantly unaffected by the virus, then it should have been short and sharp to svoid firstly the damage and secondly entrenching it as normal. But no, the goal posts kept sliding by a completely inept government. Disaster awaits.

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