Now Even Google Caves under Demand for Permanent Work from Home, Another Blow to Bay Area Office Market

“The future of work is flexibility,” Alphabet CEO Pichai told employees today.

By Wolf Richter for WOLF STREET.

Google now expects that 20% of its employees work from home permanently, 20% work in new office locations of their choice, and the remaining 60% would work at their current office but in a hybrid workweek, going to the office three days a week and working the other two days “wherever they work best,” Alphabet CEO Sundar Pichai told employees today in an email cited by the Wall Street Journal.

What was new today was that 20% of the employees could work from home permanently, and that another 20% could move to different locations.

Last December, Pichai had already put forward the idea of a hybrid workweek when he told employees that, once it was safe to return to the office, employees could work from home up to two days a week and spend three “collaboration days” a week at the office, though some employees, such as those working in data centers and labs, might not be able to work from home.

The company would be “testing a hypothesis that a flexible work model will lead to greater productivity, collaboration, and well-being,” he said at the time.

Employees would have to apply and get permission from management to change locations and to work from home permanently, Pichai said today in the email.

In June, Google will launch the application process for people who want to change their location and will provide additional information about the required approval process.

This new system would start after September, but until then most employees could keep working remotely, an Alphabet spokesperson told CNBC today.

Google’s numerous contractors, temporary workers, and vendors will likely be in the office on the same days as their teams, the spokesperson said.

Google will also double from two weeks per year to four weeks per year the period that employees can work from anywhere, to provide more flexibility with vacation and travel plans.  This also requires approval of management

This type of flexibility is designed to help employees do their best work, Pichai said in the email.

And that’s a lot of people: If 20% of Google’s 140,000 or so employees work at home, that would amount to 28,000 people who wouldn’t need space in a corporate office. And if another 20% moved to cheaper locations where Google has offices, that might take another 28,000 employees – and their families – out of the areas where they live now.

Cost cutters at Google are salivating.

Compensation of employees who change locations will be adjusted, Pichai said. The majority of Google’s 140,000 people work in the Bay Area, one of the most expensive housing markets in the US. So if they choose to move to one of the cheaper housing markets, they will also have to digest a pay cut. It would be a win-win for Google, so to speak.

Google has vast real estate holdings in the Bay Area and leases a lot of office space. It has for years been planning to build a new campus in San Jose, “Downtown West,” with 7.3 million square feet of office space and 4,000 housing units, plus retail space and plazas. The City Council is scheduled to vote on it later this month.

Google, which also has large office footprints in New York City, Austin, and Atlanta, has been spending the past years adding feverishly to its office space, on the assumption that it would continue to balloon its workforce and therefore its need for office space.

But the strategy of letting people work from home, letting people move to cheaper locations, and reducing the amount of time that the remaining people have to spend at the office is taking a lot of pressure off the need to constantly add to the office footprint.

Surveys of employees have found that somewhere around 80% and 90% of employees want at least some kind of flexibility, with many employees preferring no more than three days at the office, and a good portion of employees preferring no days at the office.

Ultimately, the bosses decide what they offer. But people decide where they want to work. And offering flexibility, a hybrid workweek, and the option of full-time remote work can be powerful incentives to attract and retain good workers. The Pandemic has proven to executives that their companies and employees can be very productive with this setup.

And for corporate cost cutters, there is a huge incentive: remote work and a hybrid workweek shift many corporate expenses, such as office space and free lunches, from the company to the household.

The sudden structural collapse in demand for office space raises some existential questions for landlords. Read… The Dynamics Behind the Ugly Amount of Empty Office Space

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  139 comments for “Now Even Google Caves under Demand for Permanent Work from Home, Another Blow to Bay Area Office Market

  1. Beardawg says:

    With Google leading the way, others will have to follow. The new landscape is starting to formulate in earnest now.

    • cocomaan says:

      Lots of meltdowns in the comments about it. Sky falling!

      It’s probably not going to make all that much of a difference. White collar work is rarely efficient as it is.

    • nodecentrepublicansleft says:

      These are the fancy pants “workers”. In Telecom, you don’t get a free lunch and some nice office. A crappy, run-down strip shopping center is more like it.

      The advantage of WFH isn’t saving a few bucks on office space (although that matters), the advantage is having happy employees! People that don’t have to waste 500 HOURS a year driving (1 hr commute each way) dealing w/traffic jams, road ragers, etc. are happier people and as such (if they’re smart), work harder!

      WFM means:
      -I don’t have to put on a special outfit or shave.
      I can take a break in own back yard instead of smelling the secretary’s cigarettes “out back”.
      -Flexibility to run an errand, I can make it up working later.
      -Not dealing w/annoying, unproductive dicks at the office.

      People are different. I don’t get a lot of my energy in the daytime. It’s better for me to work some in the day time and leave my hard work (the creative part) for at night.

      If your Boss says “I wish I could clone you.”, the WFH is doing OK!

      Not everybody is a lazy prick when they WFH.
      Not all the jobs are going to be outsourced.
      I’ve been doing this 2 decades…it’s not really that big of a deal….

      It. Just. Makes. Sense.

  2. Shiloh1 says:

    Speaking of landscape, working from home is “environmentally green”, right?

    Wildly more efficient for me in every way.

    • K says:

      Clearly, you do not have children or have a spouse who is a saint. LOL.

    • Guest says:

      Based on the current layout, people will move out to the suburbs or less crowded areas for space and peace. Once lockdown ends, they’ll be driving around more leisurely too, likely back into the city for food and entertainment and such. Or wherever else because of zoning and how places are set up. So while the commute for some may be gone, it’s certainly going to drive up consumption and emissions elsewhere. And it’s not like all the minions who can’t WFH are gone. Still out there, still dashing and gigging.

      To be green, WFH helps but and also to not move so far away. Density is most efficient and frankly one of the only ways to truly hit those rather arbitrary and unrealistic climate goals.

      • Bruto says:

        “likely back into the city for food and entertainment and such”
        if they are stuck in Nebraska or Oklahoma, maybe.
        However, no normal people are going to drive back into San Francisco from a sweet, green, clean, safe, family oriented place like Marin which is the number one destination for people fleeing San Franfesco.

        Some thrill seeking 20 year old with safety pins in her eyebrows might venture into the city, but she too will tire of it and what little it has to offer–unless she gets strung out on heroin and depends on a pimp to turn her out.

  3. Intsokzen says:

    You would think this would affect SF and Seattle home prices, but they still rocket up.

  4. Rcohn says:

    Some ramifications of a permanent change to permanent work locations in cities.
    1. Less demand to rent
    office space
    2. Less demand to build and renovate office space
    3. Fewer high paying jobs in cities
    4. Because of #3 above , demand for residential property in many cities will decline
    5. Because of # 4 , rents will continue to decline and prices for houses and condos will decline
    6. Many small businesses which service workers in commercial space will decrease , meaning layoffs of low- medium paid workers and closing of a % of such businesses . This will also result in more retail vacancies and lower retail real estate prices
    7. Fewer new buildings , lower assessments for current office , residential and retail space along with less taxes generated by current workers translates to lower tax receipts. To counter this , cities will be forced to either raise taxes , cut services or a combination of both. This leads to vicious cycle of more residents fleeing the city resulting in fewer services , especially more police , infrastructure and quality of life issues.This is exacerbated by silly laws such as Cal. prop 47, which raised the threshold for shoplifting misdemeanors to 950$ .
    Expect to see a rerun of the problems of 1970s NYC to many cities including NYC again
    8. Many holding mortgages on office buildings , especially those with high vacancy rates will be faced with defaults on their mortgages. This has the possibility of creating a entire set of different problems
    9. Public transportation systems will hemorrhage even more money than in the past. Although car traffic has almost recovery to pre pandemic levels in SF, bus and BART ridership is still way down. Already toll takers on many bridges in the SF area have been permanently eliminated to save money

    To add to all this , the inevitable repricing of the highest flying stocks to much more realistic levels will destroy a good deal of the “faux “ wealth created in the last 5 years . This will inevitably have a negative wealth effect and will exacerbate the above problems.

    • CRV says:

      It’s all redistribution. Some (around the old centres) will lose what they gained in the last decade and others (the communities who saw a ‘braindrain’) will regain what they lost.
      Adapt and carry on.

      • MiTurn says:

        Good point, CRV.

        Services will migrate to the suburbs too.

        • nodecentrepublicansleft says:

          OR……

          It’s like every single thing in life:

          WE
          DON’T
          KNOW
          WHAT
          HAPPENS
          NEXT.

          As Unknown Hinson said…..”the future is unknown…..”

      • Heinz says:

        Agree. Google’s ‘work from any of their offices’ ploy for some of their workers is just shuffling the deck– some communities (mainly Silicon Valley I would assume) lose and others gain a few high tech workers.

        That is, if you can call most Googlers high tech– I wonder how many of them are just social media mavens & PR types and corporate censors for Google platforms– though more highly paid than the average worker).

        It appears most of Google’s about 30 corporate offices are located on East or West coasts, with a few in Chicago, Detroit, and Colorado.

    • Swamp Creature says:

      Rcohn

      #4

      I have to disagree for the following reason. A lot of people like living in the city even if their job is not located there. I call it reverse commuting. I lived in DC for 3 years and commuted to the suburbs where my job was. That was when I was single and hangin out in pubs and bars 24/7. A lot of people like urban life, and don’t like suburban living especially single people.

      • BigAl says:

        @Swamp Creature

        Those days are over.

        Even before the pandemic a lot of the businesses that made cities cool & interesting were on the ropes due to rising rents, etc. The pandemic was a “killing frost” for sure, but many of the businesses it destroyed were looking at a rather bleak future.

        Finance cannot absorb the losses that would result from the “rent normalization” required to attract replacement business owners – and the Fed will ensure it won’t need to. Even as I type this, I’m perusing an article indicating that both residential and *commercial* rental rates are skyrocketing in metro-Boston.

        Sure – you might see some net population gains in cities in the Southeast and Southwest – but cities in those regions are less dense and have always kind of resembled overgrown office parks more than anything else.

      • LongtimeListener says:

        I hear you but in the PNW the local businesses and restaurants that gave our urban neighborhoods their vibe, were/are pushed out by increasing rents that can only be paid by corporate business. Yes, the setting is still urban, but its turned urban neighborhoods into suburban malls. Maybe there is less fiberglass than the Mall of America or Disney World, but that does not make it any less artificial.

      • Dan says:

        Bars were closing long before covid; bars and night life was really about finding dates; all that moved online long before Covid. So, no one cares about city night life anymore.

      • Eugene says:

        True.Singles love cities.Suburbs are boring as hell.

    • Harrold says:

      You are assuming that there will be no new businesses moving in. Ones that previously could not afford the rent but now can.

    • Bruto says:

      All true, but will the “homeless” go back where they came from when the goodies run out, or, will they just dig in and start home invading mansions on Pacific Heights?, except where secret service protects, like Feinstein and Pelosi’s.

    • Auldyin says:

      Rc
      Working on traffic projection for future road building and spending on congestion relief measures in the 1980’s, it was postulated that the growth of ‘distance working’ with computers could have an impact on the cost/benefit of transportation investment and could lead to changes in land use disposition. From 80’s on road building was constrained compared to earlier years in the hope a cure would come for congestion.
      In some ways my questions are, why has it taken so long, and is the full revolution now underway as a result of the Covid trigger? The changes will be profound in every aspect of land use and industrial planning.

  5. rhodium says:

    I can’t figure out how they even employ that many people.

    If you move to Alabama we’re cutting your pay from $250k to $40k, but we’ll throw in rat benefits.

    It’s as if they are awash in so much money they kind of don’t really care what they pay, but would rather keep everyone at the giant California fortresses for the intimidation factor. Obviously competition is not an issue. Must be nice being a monopoly.

    • andy says:

      Monopoly on what exactly?
      Plenty of great alternatives for everything Google does.

      • roddy6667 says:

        It is true. I just spent 7 years in China where all things Google are blocked. Life goes on.

        • MooMoo says:

          Roddy – that makes you a uniquely experienced voice – as opposed to a propaganda arm. Would you care to relate to the audience what life in China is really (!) like – as opposed to what the MSM tells us?

          …personally, I’d be interested….. no sarc

      • David says:

        Searching, Data and Ads come to mind

        • andy says:

          Like what specifically?
          What do you search with Google that you can’t search with Microsoft Edge, or Yahoo, or Duck Duck Go, etc?
          What data is under Google’s monopoly?
          I can do completely without Google today.

    • Island Teal says:

      I, like others, must have taken a pause when reading 140,000 employees.
      There are going to be massive adjustments in compensation and employee expense as the bean counters grind through the numbers.
      Looks some Alphabet LEAPS are in order.
      My head still spins on 140K ???

    • Jon says:

      I advise people not using Chrome browser and Google search engine
      I use brave browser and duckduckgo search engine
      I need to get rid of android phone now
      Not a fan of iPhone but may switch so that my data is protected

    • MCH says:

      Isn’t it obvious, SP has been open and he said it himself: “the future of work is flexibility.” The implications are clear as day, the future of the employee’s work at Google is flexible. As in, we might be better off without you.

      It’s not so much a mystery, it’s not that they can’t afford it, but we really know who at Google is running the show, it’s not SP, or Brin, or Page, it’s Ruth Porat.

      She looks at the balance sheet, and she says: “Hey Sundar, let’s talk about the head count here, I think we have a lot of fat that could be trimmed, remember how last few years there are all these agitators telling us don’t work with the Pentagon, don’t work with China, implicit bias, structural r*****. I think if those people are so busy protesting, then they should be freed up to protest on their own dime, not ours, don’t you think? If we cut some of the fat, our financials look a bit better, and guess whose options and grants are gonna be more valuable because of that.”

  6. timbers says:

    That’s really great news! Nothing would be better for Frisco (or London or New York or Boston) and make it livable again for working folk who pay taxes (unlike the rich and corporations which seems to have so much support amongst the WS commentors) than depopulation and most importantly getting the rich out. Now, in only we could get the rich out of America, too, so we could have our nation back. No more wars, no more rich buying our nation govt community society.

    • Nacho Libre says:

      What are you basing this on?

      Can you define ‘rich’?

      Do you know top 10% pays > 70% of all personal income tax? (source: IRS)

      • gnokgnoh says:

        Do you know that the top 10% has >70% of the wealth in the U.S. and earn 48% of all income? (source: US Dept of Commerce and IRS) The bottom 80% have 7% of the wealth in the U.S.

        • Nacho Libre says:

          Wealth is accumulated over the years and it’s unrealized too.

          Income is what comes in.

          Paying 70% share of taxes with 48% share of income not good?

          Don’t confuse wealth with income. Retired grandma who lives in a paid off house and collects SS checks can be a millionaire. A young doctor earning 300k/year might have a negative net wealth.

    • Felix_47 says:

      And 80% of people in the US get more out of the government than they put in. Even our much ballyhooed hard working migrants who pay all those taxes making more migrants an economic plus f you listen to MSNBC don’t carry their own weight. Two parents at 15 per hour make 62400 per year and pay very little in income taxes. Average cost of public school per capita is 30,000 and health coverage (in ca they get full coverage with Medical) is 11000 per capita in the US. So this hard working ideal family if they have two kids is costing the taxpayer 44000 in health coverage, 60000 in tuition and providing essentially nothing in taxes. A less than ideal family like a single mom with three kids is a much larger drain. So the rich are paying most all the expenses now and should pay more….but don’t drive them away.

      • gnokgnoh says:

        Yeah, and those kids should pay for their food at the restaurant, too. They pay nothing to their parents, or in taxes….!! You just described a couple with two kids earning $62K per year with $104K in expenses for school and health coverage, not counting any other expenses.

        What do you think is problematic about your little thought exercise? Should the couple be earning more, or should their expenses to support a family be less? Pick one or both? Good grief.

    • Swamp Creature says:

      Time to bring back Universal Military Service. Everyone serves two years including boot camp. These rich kids serve along with everyone else. Maybe that will help end these useless wars.

      No more “Rich many wars, poor men’s fight” like NAM

      • roddy6667 says:

        I agree. When everybody, men and women, have to shave their heads and go into boot camp and on to war in some Third World shithole that is no threat to them, maybe war won’t be so popular.

        • doug says:

          Start the draft with 40 year olds, and work down to younger ones as needed. The for sure, war won’t be so popular…

        • Wolf Richter says:

          doug,

          I’ll go ahead and fix that for ya: “Start the draft with politicians, and work down via current and former Federal Reserve Bank governors and economicsts, S&P 500 company executives, lawyers, all Google and FB executives and employees, and so on, as needed….

        • Nacho Libre says:

          They did start with politician’s son, but he was kicked out of Navy for using cocaine.

          He is a energy sector genius and served on company boards.

          Definitely would have been a shame to waste his talents in the Navy.

      • This generation is ready for that. More women are interested in military careers. The military has become a hotbed of white supremacists. We have had three presidents who ducked out of Nam, for various reasons. Some alarm that a number of capitol rioters had military service, including the rioter who was shot. Her family is now sueing the government. Some irony, I don’t think most of these people go back to Nam. Despite the fact that was an unpopular war, and I disagreed with myself. I am a Nam vet, and I take great offense at the insurrection. Now we have bad people in the military, too many of them, no matter how much they hide their actions behind the flag. When you sign up to do your duty, check your ideology at the door.

        • 91B20 1stCav (AUS) says:

          Ambrose-so very well-said. (Wolf-understand, as always, if the following is x’ed out as offtrack). I would venture, though that options for national service (Head Start, Peace Corps, VISTA, even WPA, etc.-type programs) be part of a new draft scheme for a couple of reasons-

          1. The message of massive U.S. national militarization that would be sent to the rest of the world would raise uncomfortable questions about any effective military’s need for live-fire training deployments, possibly outside of their neighborhoods. (Agree that the possibility of such when everyone has skin in the game could induce a bit more thoughtfulness among our citizenry and thus make such deployments less-likely, but belief from other countries in our intentions could be a long time coming…).

          2. ‘Everybody in’ would need the options above to deal with the ‘washout factor’ that always exists in any population-in other words, you may not, or want to, make it as a soldier, but you WILL perform your service to the nation (and receive some sort of training) in some meaningful capacity (as i’ve said here before, i’m constantly having to curb my tendency, when ‘thanked for my service’, to retort “…and what service may i than YOU for?…”).

          3. (given human nature, and this will be VERY difficult to achieve)-‘everybody in’ means ‘EVERYBODY IN’ until the concept reroots in our nation’s general consciousness.

          (This said from my own, drafted, experience. I was a lower middle-class kid at a lower upper-class high school in SoCal. When I returned home (in one physical piece, luckily and thankfully), i met up with friends from that high school, some of whom i knew had lower draft lottery numbers than mine. When i asked them about their Army experiences, it turned out they had not been called up. Eventually came to the conclusion that it was probably due to the fact that my old man didn’t play golf with some people on the local Draft Board…). Being a citizen of a truly successful nation requires a lotta skin in the game.

          may we all find a better day.

        • philm says:

          Ambrose, I think it’s 4 presidents who skipped out of Nam- Clinton, W, Trump, Biden ( as well as a VP or two like Cheyney)

        • Swamp Creature says:

          It was no insurrection. You are parroting the BS in the media. It was a peaceful protest until 200 troublemakers from who knows where showed up and hijacked the demonstration. 99% of the people down there were patriotic Americans who obeyed the law. Same with 99% of the military people down there. The police were undermanned for the task at hand and didn’t do their job of protecting the Capitol. Actually, their actions and incompetence added to the chaos and confusion.

        • Swamp Creature says:

          Clinton’s actions were the worst of the lot. He was in the delayed enlisted program. It was where you signed up and deferred reporting for active duty until you finished your education. This was usually for 6 months or less. He reneiged on his commitment. Some other poor slob had to go to NAM in his place. For that reason alone I never accepted him as my President. I was in the same program, delayed enlistment. I got a lottery number of 69 and was glad to go into the service and get into the career field that I wanted. Even if I had gotten a high lottery number I wouldn’t have backed out.

        • 91B20 1stCav (AUS) says:

          Swamp-as long as we are going offtrack here, then why so much certain-party (daresay ‘BS’ as you put it) opposition to a proper Congressional investigation of what happened on 1/6?

          I fear that a significant portion of our population has inverted the formerly American core value, one that requires constant tending, that we are a nation of law-not men (to expand Ambrose’s comment ‘do your duty’ also means when your party loses an election, suck it up, look forward, and do your job as a citizen to convince a majority to support your party in the next one).

          The spineless cult of personality that has congealed around the former Executive makes my blood run cold…

          may we all find a better day.

      • LongtimeListener says:

        Nam? The country is winding down a 20 year mission in Afghanistan most of the US has ignored. Frankly, I don’t think this mission lasts half as long if we have National Service. I think it makes crummy international policy a front burner issue.

        • 91B20 1stCav (AUS) says:

          Longtime-you’re right, but Americans historically seem to find a serious, thoughtful, critical examination of our international policies boring until they can no longer be avoided. (This may also be termed as ‘we should mind our own business’ while not actually doing so).

          may we all find a better day.

        • Rcohn says:

          Look at the Vietnam disaster as a reference point concerning the military draft. If we did NOT have the draft then , the US ‘s participation in Vietnam would have been either nonexistent or very sharply limited.
          The neocons in the US have shown a voracious appetite for military adventures , which are stupid, impossible to win , costly and destabilizing for the region . Afghanistan And Iraq epitomize the above points.
          Any future fighting will involve either China or Russia in territory where we have both a geographic and strategic disadvantage .

        • 91B20 1stCav (AUS) says:

          Rcohn-i take your point, but i think you need to give more consideration to the contemporary realities of the post-WWII Cold War era (the draft was not, on its own, responsible), wherein Eisenhower’s caution about the MIC didn’t truly resonate among the citizenry. Or, as a chapter from Tuchman’s ‘The March of Folly’ was entitled: ‘America Betrays Itself in Viet Nam’.

          may we all find a better day.

      • Heinz says:

        “Time to bring back Universal Military Service.”

        Well, that was the rule over half a century ago in US– you may remember that even celebrities like ‘the King’ Elvis Presley got drafted into the Army.

        But, today’s youth doesn’t pass muster overall. According to a study by Heritage Foundation, nearly 3/4s of military-age people are unfit for the service (mainly due to health problems or lack of physical fitness).

        On top of that, it is hard to intimidate serious military powers like Russia and China when our armed forces are now full of ‘wokeness’.

        On the battlefield no one is going to offer you a time-out ‘safe space’ to clutch a stuffed animal and your enemy in battle is ‘microaggression’ writ large for snowflakes.

        .

        • LongtimeListener says:

          Reading Generation Kill right now, maybe you should too so you can see how “woke” the combat arms are.

        • robert says:

          While never liking the idea of the draft, I always admired how Elvis showed up on time and did his service instead of using every trick, like fake disability, adopted religion, influential friends, or an army of lawyers to avoid it although he certainly had the resources to do so.

      • Swamp Creature says:

        When I came back from serving in the Navy for 3 years overseas supporting the Vietnam War ( I was in the rear with the gear) I was shocked to see that not one rich kid served one day in the armed forces. All of them got doctors to write phony medical reports. The only people that served were poor and lower middle class kids from working stiff’s families.

    • aqius says:

      no one calls it “Frisco”. It ain’t Texas.

    • MooMoo says:

      Dude – in case you haven’t noticed it – WS is a left/liberal website…with left/liberal commentators.

      • 91B20 1stCav (AUS) says:

        Moo-what’s your point? Doesn’t cost a dime or an arm-twist for any slant to be here (and they are) , or prevent one from commenting as long as you keep it civil (Wolf, very generously, even allows things to go somewhat offtrack in the comments if they are interesting-what does your, or my, comment have to do with Google/WFH, for instance?). So again, please enlighten me as to your point?

        (a guess on my part-an old lesson worth remembering from U.S. politics-you gotta know how to accurately count-ALL sides-wishful thinking loses elections-or a business…true in ’16/’18/’20-both parties, business forever. Wolf counts business/economies, with great charts, even-and i don’t recall ANY wishful thinking in my years of perusal here…).

        may we all find a better day.

  7. Mike R says:

    Google deserves nothing better.

    • BigAl says:

      Mike R,

      Agreed. I work in the IT industry, but I am the first to admit that all Google has succeeded in doing is make the Yellow Pages more complex, costlier, and creepier…

      At some point some economist will win a Nobel Prize for (accurately) depicting the “digital economy” as nothing more than a colossal rent-seeking beast sowing dead-weight losses throughout the economy.

  8. DawnsEarlyLighr says:

    More reason to outsource. We never learn.

  9. DawnsEarlyLight says:

    More reason to outsource. We never learn.

    • endeavor says:

      We already have a lack of demand and little velocity of money due to outsourcing and wage repression. Do more of this and UBI shimmies will be a regular feature. Isn’t it better to pay people to work than let them become the devils workshop?

  10. foo says:

    20% full time remote jobs = 20% full time outsourced jobs to South America/Eastern Europe/India

  11. ML says:

    A benefit to customers when speaking with someone WFH is that when for any reason the person puts you on hold unlikely you will have to tolerate music while you wait.

    Background noise of baby crying, dogs barking, is a norm.

    • Anthony A. says:

      The WFH Schwab lady I was calling a few months ago on an issue kept losing her home internet connection. She would call me back and apologize. LOL Plus, she couldn’t help as she had to conference in another tech but she couldn’t figure out how to do that.

      • Swamp Creature says:

        AA

        Get rid of Schwab. I had an account with them and they were so crooked I had to close out my account. They wouldn’t even let me do that. One of their bond funds, I forgot the name, I had my kids college fund in was closed and the Fund managers indicted.

  12. Mongoose says:

    The burning question is; How many WFH jobs will end up being done in homes outside US borders? And don’t think the CEO’s, CFO’s and other Chiefs aren’t already running the numbers on potential savings.

    • ian says:

      Exactly. The employees demanding this “future of flexibility” I don’t think are looking far enough ahead

    • WWR says:

      I think this is the real Trojan horse of WFH. Offshore could be even a bigger cost saving than WFH

      • Harrold says:

        Offshoring has been going on for 25+ years now.

        • WWR says:

          Will offshoring expand beyond IT? One example, my GP does telephone and internet consultations. What about shifting those consultations to India. Some things can only be done in person, but are there not other occupations that could be done from “anywhere”, including outside the United States?

        • Apple says:

          My company outsourced the HR department to a BPO located in Cebu, Philippines.

    • BigAl says:

      Exactly.

      Notice the rally in IT-based outsourcing stocks like EPAM? I sure have.

    • Keith says:

      It will depend on the job. I have been WFH with .gov since around 2012 in various capacities. All involved meeting with people, conducting reviews, etc. Just because a position is WFH does not mean the employee is working in his house.

      Positions that do get outsourced are positions that were likely already on the chopping block.

  13. LeClerc says:

    Google will get workers back in offices when they restart their bus line.

    Nobody is going to drive from Marin or Santa Cruz to Mountain View even three days per week. Many people who work at their SV campuses live in SF, and don’t own cars.

    Good luck getting them to the office without the buses.

  14. Engin-ear says:

    After self-checkout in supermarkets, here comes self-office.

    Next in pipe: self-beating for bad work.

    But more seriously, this WFH seems to me the most socially disruptive innovation after the Internet.

    • Paulo says:

      There sure are big changes coming. I do have a problem with Google and ilk penalising employees who choose to relocate to a cheaper area. In my world you get paid for the job performed, not some other criteria.

      “Hmm, you’re what, getting married? Well hells bells, you sure don’t need the same pay as Johnny Single now that you have two incomes coming in”.

      “You inherited some cash? Well, we should probably reduce your profit sharing cheque this year because Johnny Single didn’t”.

      “You sold out and bought out of town, then……..”?

      I once worked for an asshole in aviation who reduced a dispatcher’s pay after her husband died and she started to receive the ‘widows pension’ from the Canada Pension Corp, (just a portion of his previous earnings). I think she made the mistake of wearing a nice coat to work one day.

      Time for the techie rollovers to unionise in some way or fashion. That is why I have been a proud union member for most of my working life. Working union wasn’t always the ‘best’ deal/job, but at least it wasn’t at the discretion of the ‘boss’. It was laid out for all to see and there was provision to reopen terms at contract maturity which reflects the changing marketplace for both parties. I have also worked non-union for people who wouldn’t dream of manipulating terms because of lifestyle. It wouldn’t even occur to them.

      You think they won’t contract your job out down the road? What, you’re special? Everyone thinks they’re special? Then one day some bean counter comes up with an idea to…….

      Bye bye.

      To quote Wolf:
      “Ultimately, the bosses decide what they offer. But people decide where they want to work.”

      When people choose to live in a ‘poorer’ area they give up a lot of perks and comforts taken for granted. If they can get the job done and be just as productive, they should be paid the same as someone who chooses to live in ‘town’. In fact, historically it has been the other way around. In many many collective agreements employees receive a premium for living in the boonies because their cohort chums won’t. Just because tech employees dare to lift their heads and be different, or choose to relocate for home ownership or lifestyle, it’s their business as long as it fits within the needs of the job requirements and company goals. If the company merely insists to control their employees for no good reason, time to move on.

      (There’s a reason why Amazon sorts packages in Alabama). Money money money.

      regards from an independent rural dweller :-)

      • Keith says:

        The federal govt (US) already does it with their locality pay system. I actually ended up getting promoted but taking a pay cut when I went from Dallas pay to flyover.

        Another tidbit, the feds are also right to work.

    • Keith says:

      Wait for electric vehicles to be widely adopted. That will cause a lot of turmoil.

  15. otishertz says:

    Alphabet Agency gets so much money from the government to spy on us that placating their current employees with more Work From Underwear options seems manageable, they can afford it.

    However, my prediction is, the other two days of “wherever they work best,” will lead to those phantom work days being eliminated in short order. It’s not like google cares about you.

    Eliminate compensation for 2/5 workdays and save 40% on labor. Coming to a theater near you.

    • Swamp Creature says:

      otishertz

      Better yet abolish a couple of these Alphabet Agencies. They are useless bearurocracies. I know. I was in one of them.

      As our friend David Stockman once said when he was OMB director for the “Gipper”

      ” You can’t just cut back these bloated agencies. You have zero them out completely, otherwise they grow back bigger than before”

      From his book “The Triumph of Politics”

  16. otishertz says:

    Google also has a very large presence in the Columbia River Gorge with their huge facility in The Dalles taking advantage of the cheap hydropower electricity like I do.

    Google, and Boeing operating as Insitu in Bingen, Wa, have overtaken orchards, farms, and lumber companies not only in payroll dollars but increasingly in culture.

    These spooks flock to Hood River and parade around in yoga pants and trainers, drinking from disposable plastic bottles emblazoned with “organic” emblems. All apparently sharing a common opinion. Like frickin pod people. Afraid of their own shadow. Wearing their muzzles obediently while politely consuming.

    These soul-less beings are a scourge upon the earth and I rue for any community infected by them. That probably sounds harsh but those people are annoying.They are all infected by progressive mind programming. Only thing good I can say about either of them is the Google employees are at least more interesting to speak with than the drone building Insitu employees. Insitu people come across as dumb and afraid. Google people are more of the smart and wary type.

    • OutWest says:

      People who studied tech in college are nerds for the most part which explains a lot about what you point out. They spent much of their early adulthood staring into a computer screen learning to code, etc.

    • Bobber says:

      My God! Are they drinking smoothies?

      • nick kelly says:

        He ‘apparently has the opinion’ that smoothies are evil. But since I haven’t asked him, I don’t know.

  17. Twinkytwonk says:

    Once they have perfected working from home then they can outsource all their jobs anywhere in the world. It’s amazing how many “intelligent” people don’t realise that they are cheering on their own disposibility.

    • 91B20 1stCav (AUS) says:

      Twinky-if we could only harness the power of hubris…oh, wait- looks like someone already did…

      may we all find a better day.

    • sinsevil says:

      Blockchain….Blockchain…..and Artificial Intelligence. No need for middle men and workers – R.E. agents, lawyers, mortgage brokers, bankers, etc. It will be the future whether the Boomer generation and above wants it to happen or not (including Buffet and Monger). People under 30-35 don’t give a rats ass what the older generation thinks.

  18. Kenny Logouts says:

    Permanent WFH.

    With an SF salary in a nice area of India you’d live like a king!

    Soooo, it’s not going to happen is it.

    Expect salary cuts as this is the perfect excuse to “hedonistically adjust” salaries efficacy.

    And employing people from anywhere, no need for work visas and all that jazz.

    So this may all feel “great” for workers, but the reality is you’ll be probably paid less and possibly be replaced.

    And we keep hearing about inflation risks… something driven by rising disposable income and/or salaries. Hahaha.

    • roddy6667 says:

      $11,000 US is upper middle class for most workers under 30 in India. What does it take to duplicate this in Cali?

    • Heinz says:

      Bottom line for WFA employees employed by big corporations– although managers say it is win-win for company and employees, thing again.

      As this evolves I expect CEO and CFOs to devise ways to leverage WFA to cut costs dramatically.

      I don’t think the typical worker will think it is all so grand after 5-10 years. I expect many hapless ones will be outsourced or given independent contractor (standby employment) status by firms.

  19. Tom20 says:

    Work from home, learn from from home, flee to the country, stay home stay safe….certainly keeps my business busy.

  20. Christopher H Mccrea says:

    Lol my company is way smaller and we’ve already begun having employees working from home or the office.

  21. Jack says:

    any company that reaches the valuation of $500 Billion should be taxed at about %50 at least, if they don’t employ enough people or invest directly in the country where they’re incorporated.(a ratio of a good corporate citizen must be applied).

    There are No benefits to society at large of having a “ private or publicly listed company “ that have that sort of clout over the political and societal forces.

    and is demonstrably using it’s influence to change the public discourse in a manner that have positive impact on its own bottom line!

    This may sound like a muzzle on capitalism ( a concept which I subscribe to) , but it is Not.

    The existence of any Force be it political or economic that have a huge and unbridled influence on human society without balancing forces will cause huge imbalances on the future progress of mankind.

    This responsibility (the break down of large forces) lies squarely on the parliaments of “ democracies where they exist “.

    The dystopia is created by lack of such balancing forces.

    Accordingly, google, Apple, amazon and all other corporations that exert huge and vital influences on our future must be Broken up and put under very strict rules.

    Rules that have to be as dynamic and flexible as technology progresses.

    One have to only listen to the likes of Eric Schmidt former google CEO, to understand how dangerous people like him can be when given un divided attention of our “ law makers”.

    These people forget that they’re part of society, not above it.

    But , on the obsession of Wolf in the matter of California’s real estate prices is getting out of hand!?

    the flux that real estate goes through throughout the economic cycles is natural part of demand and availability.

    Going forward, I think that large metropolises will have to strive for efficiency in terms of providing a balanced lifestyle to its residents, thing like Tranport,jobs, buildings usage, and general town planning have to evolve to accommodate the needs of its residents.

    The actual function of metropolises is also another facet that is going to change in light of new technologies and general advancements that might occur.

    We don’t know wether a certain size population is required to have an efficacy that will fulfill the future needs of its inhabitants as measured to the current proportions.

    So google might be vacating some %50 of its offices , that might turn to other uses.

    Naturally these movements will cause outstanding damages to funds, corporations that invest heavily in the commercial real estate market .

    Are we going to be worse off, if google get the hell out of our cities?

    I doubt it.

    • 91B20 1stCav (AUS) says:

      Jack-The tide goes in, the tide goes out. T.Roosevelt and others saw this effect in the Gilded Age. The beach again appears to be submerging…

      may we all find a better day.

  22. gl says:

    I’ve always been told the best thing coming out of California is an empty bus!

  23. Chris Herbert says:

    I don’t have a citation but I’ve read that taxes on wages make up 80% of all tax income. Whereas taxes from corporations comprise less than 10% of all tax income. Anyway, the top 10% pay 70% of all tax income seems out of whack to me. The Tax Foundation cites that statistic. It has a conservative, center right bias. Of course there’s a significant number of people working who are highly paid. So ‘wages’ may be loaded too.

    • Lisa_Hooker says:

      If you make $14,280,000.00 in 2021 you and your employer pay Social Security tax (6.2% + 6.2% of gross income) on only $142,800.00 – the 2021 cap.

  24. Gene says:

    I spent 33 years working for a DoD agency that audited defense contractors. It was highly preferred that the auditors visit the contractors in person, even if the requested information could be obtained by fax and and later email. This was called “kicking the tires.” Late in my career, limited teleworking was authorized. One employee regularly disappeared for several hours at a time during telework days, not returning telephone calls and not responding to emails. Nevertheless, because she was an “untouchable,” the supervisor did not question her. Now in my retirement I see two federal employees living in my home owners’ association, one working for the Pentagon and one working for the DEA, who telework 2-3 days a week and who seem to have plenty of time on their hands. One walks his dog a couple of times a day. The other can be seen out jogging. This has been going on for the last year and is obvious abuse.

    • Xavier Caveat says:

      In regards to those neighbors perambulating, which foot did they lead with?

    • Paulo says:

      You absolutely do not know what hours they spend on the job. You are inferring. My SIL works from home. He starts early so he can take his daughter to school. He not only makes up this time, he actually works far more productive hours than what he did in the ‘office’. Sometimes he takes other time to ‘do things’. He lets his boss know because they are ‘connected’ and working in collaboration. “No problem”, she says. “You know what needs to be done, but thanks for keeping me informed”.

      His supervisor is 3,000 km away, but she knows exactly how much he gets done. In fact, he just received a big promotion.

      If someone wants to go for a run it’s their business. Beats running after dark and getting attacked, or worse.

      • Kenny Logins says:

        There’s only so many hours in a day.

        Spreading your work wider and thinner doesn’t sound more efficient to me.

        It sounds like a recipe for playing catchup on an evening or early morning and a slow burn-out.

        I’ve worked both ways and for me staying 100% focussed for 8hrs in a proper environment is far preferable to WFH with perpetual distractions.

        Indeed when I have big projects on they get shunted to 9pm till 3am mostly as it’s the only time I get zero distractions.

        • Billybob says:

          Bah!

          That’s what works for you, Jack. Not for me.

          Stay off my lawn, and I’ll stay off yours, ok?

    • Bobber says:

      I can imagine the write-up they have on you!

    • Phil says:

      Failure of imagination to not see how work from home can also mean more flexible work/life schedule & balance. I find myself to be most productive from around 1pm until 10pm. Who cares if someone wants to walk their dog, if they’re getting their work done?

      • Harrold says:

        It seems that work outside of 9-5 does not count to the old school managers.

  25. Micheal Engel says:

    Rollover lumber and bitcoin for gold and silver, for Munger.

  26. JP says:

    I am curious how this will affect the new Pelli Clarke Pelli tower under construction here in Austin, TX. Last I heard, Google had leased 100% of this very large skyscraper. Commercial construction in Austin has been booming, even as vacancies pile up. Seems unsustainable to me as everyone I know here (outside of the service industry) is working from home.

  27. Micheal Engel says:

    Wife’s GPS know where u are…

  28. How much does WFH alter company loyalty? Too bad they didn’t do that with the cabinet in the last presidential administration. Easier to blow off your bosses outrageous requests? Will your boss berate you on twitter if you don’t comply? I guess you could defriend him, or her. WFH could be enlightening, on the other hand I see vacations with people working on their laptop while they ride the monorail at Disneyland to Tomorrowland?

    • Harrold says:

      The last Sec of Navy (who only served 8 months during a pandemic) racked up $2.5 million in travel expenses during 22 trips, including a $232,000 trip on Jan 20th to the Wake Islands.

      There are no sailors or Marines stationed on Wake Island.

  29. stonedwino says:

    Even though NYC feels like it’s coming back to some sense of normal, that’s only visually evident in neighborhoods like The Upper West Side, Upper east Side, Greenwich Village and even Tribeca feeling like it’s getting some life back. These are are mixed neighborhoods, with residential, small stores, restaurants, what makes a neighborhood in NYC. Midtown and Wall Street, where it’s almost exclusively commercial real estate, still feels like somewhat of a ghost town. a lot more local businesses have shuttered in the parts that the rest I mentioned earlier, especially so the restaurants in these commercial RE dominated areas – they’ve been shuttered almost uniformly. I don’t see when & how that improves…

  30. Mike says:

    “Compensation of employees who change locations will be adjusted, Pichai said.”

    A lot of comments here are related to this. And the expansion of off-shoring that “WFH” worker. I do agree that will happen, and is a risk in general.

    But, one thing that I’m already seeing interviewing and hiring programmers is supply and demand. At the end of the day, we don’t really care where someone is. If they can produce what’s needed, and meet the quality bars we have. We are going to have to make offers based on the delivery of the position, not where the person is working and lives. That dynamic, while starting now, will get larger. More companies will start to compete for that worker in the low cost of living areas. And offers will rise accordingly. We are about to do it – better to out compete our competition now, than struggle later. Others will too.

    Of course, over time, there will be a cost analysis and that may indeed lead to off shoring. But the quality of the developers has to be taken into account in that analysis. And the ability to coordinate with co-workers (time zones matter). Lowest bidder isn’t the smartest solution for many companies – especially programming based companies.

    • Alku says:

      “At the end of the day, we don’t really care where someone is.”

      Are you hiring contractors or full-time employees?

      If the latter – what contract you do if you are in the US and the coder is in Malaysia? Benefit? Just curious.

  31. Swamp view says:

    We were informed yesterday that they are giving up the lease on our downtown offices here in the Swamp. WFH indefinitely. Feds and contractors. Major government department.

    I wonder what’s going to happen to the commercial real estate developers and the property management companies.

    I wonder if AMZN wasting a lot of money developing fancy new offices across the river if they could’ve leased some of these cavernous empty fed buildings downtown?

    Also – what’s going to happen to all the parking garage operators? Parking is big business here in the Swamp, but WFH has put a serious damper on that one.

    All of this despite numerous reports over the last decade of vast numbers of unused/empty government-leased buildings in the Swamp region…

    • Swamp Creature says:

      Swamp view

      I would stop worrying about commercial real estate developers and the property management companies and worry more about your own job. Look like it might be on a fast tract to outsourcing or elimination.

    • Lisa_Hooker says:

      So what happens to the expected returns from all those REITs we invested in? Do we get a suprise? /s

  32. Brent says:

    “I’m shocked ! Shocked to find that homeless people live there !”
    Captain Renault, “Casablanca”

    I concur.Majority of WFH-ers are nothing more than pampered,uppity,elitist wimps scared sh…less of the Real World.

    After sharing elevator ride with homeless people they throw hysterical fits and leave disparaging reviews on TripAdvisor:

    “”‘This location used as a HOMELESS SHELTER

    Review of Hilton DoubleTree, New York Downtown:

    We had read about NYC hotels (even $600 per night hotels) taking in homeless people in exchange for taxpayer money, but haven’t experienced it personally.

    Until recently. 25% of the hotel is rented to them, and they ride in the very slow elevators with paying ($339/night for us) guests. I told the manager that if I wanted to stay with homeless people, I would sleep on the sidewalk for free.

    The people are rough and strange (they ARE homeless people, so it’s to be expected).

    Guests should be warned BEFORE they BOOK at this hotel. The location is great, but there are some very, very serious drawbacks to this hotel.

    We will never stay here again. What is Hilton thinking? Do they not realize the liability of housing homeless people with their guests? WOW. “””

    What is the Big F… Deal ???

    It is still 5 star Hilton,only room prices went down from $600 to $107 last time I checked.

    If you catch scabies from the homeless it is covered by health insurance.There are natural cures for scabies too.

    One may even teach homeless people how to code in the conference room ☺

    • Ted says:

      One of the premier West Coast hotels required a hazardous materials cleanup crew, the result of the city’s policy of housing the homeless on the taxpayer’s dime during the Covid crisis.

      The Intercontinental Mark Hopkins, a luxury hotel atop swanky Nob Hill, dispatched unruly guests to another undisclosed property. Afterwards, a hazmat team showed up to tidy up the premises, according to ace KRON reporter Erica Sandberg.

      “The guests wouldn’t abide by the rules. The city paid Ubers and cabs moved them to a different luxury hotel,” she said.

  33. Danno says:

    Curious to see what this does to the divorce rate and birth rates worldwide…

    Nothing better than the transition time to relax, think driving to and from work…

  34. Robert says:

    I think people will turn sour on the ‘work from home’ trend once companies start having snap inspections in your home during the day.

    You will need to prove you have a working environment that is conducive to productivity. For instance- being surrounded by a dozen bird cages and owning a 12 foot python might be frowned upon.

    How many people are working stark naked?

    • Heinz says:

      People talk about distractions in the office, but what about distractions working in a home environment?

      Kids and spouses are doing all sorts of noisy activities, cats walking on keyboards, dogs barking when you are on Zoom or phone, trying to catch up on laundry in between emails, and, if you are alone for a change– the irresistible urge to indulge in more downtime playing online games and other pastimes online (with no fear of a supervisor or coworker looking over your shoulder).

    • Swamp Creature says:

      A dude neighbor of mine, a carpenter, a while back got a workman’s comp claim for 200k based on a phony injury claim. He continued to WFH doing handyman carpentry work. That was until the company hired some investigators with long rang telescopes to spy on his activities. They were located far enough across a main US highway that he couldn’t see them. I think he got busted but I never found out the final outcome. These WFH cheats are going get busted sooner rather than later. Good.

  35. Ross says:

    This is ironic since Google has spent the last 3 years constructing two huge circus-tent-shaped office buildings (“Bay View” project, totaling nearly half million sq ft) on Moffett Field in Mountain View. Until late last year, the site boasted SIX 150ft tower cranes right next to the Moffett runways. Now that’s what I call an obstruction ;-)

  36. MonkeyBusiness says:

    Coinbase is closing their San Francisco offices.

    • Wolf Richter says:

      Yes, one more on the long list that is getting longer by the day.

    • Swamp Creature says:

      I’ve got a good proposal for the new administration. Take all this infrastructure stimulus spending and use it to subsidize the demolision of all these useless empty downtown buildings which are now functionally obsolete. Salvage as much of the used toilet seats, HVAC systems, elevator motors etc and sell them on the open market. Turn the area into a park with trees to help reduce CO2 and mitigate Climate change. The whole effort would provide jobs and help the environment. A win, win, win.

  37. neel says:

    And so instead of H1s they’ll now simply hire Indians in India.
    At $15/day.
    Wasnt’ that the plan?

  38. Auldyin says:

    Will we ever cut to the chase on all this stuff and finally get it that modern industry is SO productive that nobody really has to work very much any more other than care professions, and we are really arguing about how we divide up the spoils. You’re either a ‘serf’ or a ‘lord’ in the present system, and unless that basic relationship changes, the serfs will go on being grateful for however their crumbs are handed out.

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