Tech firms are beginning to push back against remote working.
Key details
Apple is one of several companies attempting to draw remote staff back to the offices. The company has set a deadline for corporate employees to work onsite for at least three days a week by Labor Day, according to Bloomberg’s Mark Gurman. Employees are expected to work onsite on Tuesdays, Thursdays, and the third day of their choice.
Tech firms are struggling to maintain productivity with a majority of their staff remote working. Apple, Alphabet, and Meta Platforms have reported productivity losses, with the latter reporting a significant 1% drop in second-quarter revenue since last year.
“U.S. labor productivity declined for a second straight quarter, amid a broad trend that output per hour worked has fallen since the early stages of the pandemic. Paying staff more to produce less feeds into higher prices,” according to Barron’s.
Why it’s important
Having a high percentage of remote workers is having a negative impact on company cultures. It is leaving office buildings half-filled and making it harder for firms to operate and communicate internally and externally, which is beginning to affect profitability.
JPMorgan Chase CEO Jamie Dimon noted the loss of “creative combustion,” that employees work better together in person. He also said that his company has lost clients and deals due to the fact that competitors were willing to travel and meet in person. Dimon also dismissed remote working as “management by Hollywood Squares.”
Morgan Stanley CEO James Gorman said in an exchange with Wells Fargo Securities analyst Mike Mayo that mentorship needs to happen in person and can’t be handled as well remotely. Gorman says he still plans to be “flexible where flexibility is called for” and to allow remote working to continue with respect to employees’ health and family needs, but suggests he will start adding pressure to return employees onsite.
Backing up a bit
The COVID pandemic forced many companies to embrace remote work. Many companies have chosen to make this change permanent. “The transition to working from home has been fast and furious for a lot of organizations over the past few years. Now many companies have learned that permanent remote work is the future of work—pandemic or not,” says Flexjobs.
According to Pew Research, 61% of remote workers are doing so by choice. “The impetus for working from home has shifted considerably since 2020. Today, more workers say they are doing this by choice rather than necessity.”
Return-to-office rates in New York City are as low as 40% in New York City and 37.5% in San Francisco, according to MarketWatch. The national average is 44%.
Notable quote
“If you can go to a restaurant in New York City, you can come into the office, and we want you in the office. By Labor Day, I’ll be very disappointed if people haven’t found their way into the office and then we’ll have a different kind of conversation,” says Gorman.
