76% of American CEOs say they may shrink office space | Hacker News Reader

76% of American CEOs say they may shrink office space

fortune.com

116 pointsapress102 comments

Not just American CEOs. We just gave up 2/3rds of our office space and are entirely remote. We still have the office mostly as a place that 'anchors' the company in a legal sense but in the future that might just become a PO box at this rate. Ironically, in November last year we just expanded and then within two months that turned out to be a bad decision. Fortunately I always keep leases short even if that is a bit more expensive per month it gives more flexibility and that has been an asset several times over the last 35 years already.

So, you're saying nearly a quarter of American CEO's won't even say they "may" reduce office space by some amount? That is so vague (and non-binding in any case) that I am kind of surprised they didn't get 99%, with only the CEO's of office space subleasing companies not joining in.

I have WFH for several years now, I'm not opposed to it, but the idea that it's going to become the "new normal" seems, at the least, premature. My guess is that the long-term impact will be less than currently expected.

It's not binary (remote or office). My company was going to rent about 600 extra desks this year, but we added 0. Management is surprised how much we got done while being 100% remote. After the pandemic we will come back to a hybrid work schedule - 2 or 3 days a week from the office and hot desking.

True, but the question about whether they "may reduce office space" is binary.

Call me oldfashioned (despite being early 30s), but hot desking does not sound appealing to me. I want to feel like I have a space that's mine at work.

Where would I store my work papers? Right now at my work desk I have a little library of technical books. What about putting up pictures of family? Decorations during holidays? The older I get the more these things are important to me, as silly as they may sound. Perhaps it's because work becomes a larger and larger portion of my life. When I was fresh out of school it kind of felt like something I did for X hours before coming home to my "real" life, like a pseudo-school environment. But as time passes (and if you like where you work), work can become a bit of a second family. Having my own space adds a sense of belonging and stability that really acts to boost my productivity and sense of team commitment. I did something that that basically amounted to hot desking at a previous job and I found it miserable. I never felt settled.

Perhaps there is some sort of introvert/extrovert thing going on. I am social and love my coworkers but at heart I'm an introvert; having my little space gives me a sense of being able to retreat a bit. Paradoxically that improves my sense of belonging -- it begins to feel a bit homey. Maybe extroverts are able to fully get their sense of belonging just from being around people.

I do think that flexibility will probably be the way forward. If Bob wants to be full time remote, and Mary wants to be a hybrid, totally reasonable. I would just seriously miss "my" space.

Forget about private spaces. Age-bias is real. Especially after 35+ when you start to lose hair. WFH does help significantly to fight against age-bias. I hope full remote becomes the norm.

Me over here fully bald since 21 wondering what life could have been like if only

That would be true if you don't have any video calls, or all the interviews are done without resume screening...

I sense an opportunity for some anti-aging software.

Exactly that's my point which i should have been explicit. Currently technology exists to smoothen wrinkles in real time video. Also considering asking for age is not legal in may places this would significant avoid age bias.

Somehow, Scanner Darkly's pictures of anonymity shell comes to mind...

You should try coming to Europe.

I have repeatedly had to tell recruiters that no, I am not adding a picture and date of birth to my CV.

They were completely baffled by the concept.

Are you meaning they expect that in Europe? I've not seen it asked for in the US.

Yes, the first sentence was meant to follow "You think that's bad, ..."

Why they would try to open themselves to discrimination lawsuits is beyond me.

No one over here is as sue-happy as the US is (at least in popular perception).

For discrimination maybe they should. It's quite an important issue.

Germany and Sweden are the top 2 most litigious countries in the world, so I guess perception is off.[1] The USA is still in the top 5 though.

[1] https://www.academia.edu/35495485/The_Most_Litigious_Countri...

Well, the fact that I have more than 25 years of experience kind of tells that I am not a 28 years old anymore, doesn't it? Also, I think it is pretty standard in Europe (and I think I saw this in Australia too) to refer to person in newspaper as Name, <age>, which makes it a "common practice" of sorts...

It is hard to hide an age :)

The way one recruiter explained it to me is "they want to build a mental image of the candidate while looking at the CV".

So either

(a) they want to discriminate (even subconsciously, like thinking 'I can't imagine this face having this experience) or

(b) (which I find more likely) they just want to turn away candidates before investing the 30-45min first call that's meant to establish that the CV and the person actually go together (and the candidate hasn't just made wild shit up).

So "understandable" but undefendable in my eyes.

I just don't see the appeal of triggering PTSD from late nights grinding at what was de facto a hot desk in the basement of my college library as a full time job until I retire. That sounds like a horror movie to me, honestly. I also need my workspace to be mine.

Agreed. Nothing says “interchangeable drone” more than not having your own space at work.

Hot desking for a day or two a week where 25% or more of that time is face to face meetings it wouldn't be a big deal to me. I get wanting "my space," but that would be my remote desk.

Hot desking as a day to day thing sounds awful and dehumanizing.

Alternative title: "76% of people large portion of whose jobs is to represent the company as cool, trendy, and modern say they will do a trendy thing."

There will certainly be some change after the pandemic ends, but it is extremely difficult to estimate how much.

Love it. Nice succinct dismissal!

I'm honestly asking because I can't tell, but is that sarcasm?

It is hard to tell. But I actually liked your dismissal. So concise.

Any cool, trendy and modern thing tend to stay if it can save some money for a company. Good example is open office. I haven't heard companies pointing to studies that shows a nice cubicle with walls is better for employee's mental health than open office. On the other hand they keep telling how open office promotes open collaboration etc because it saves them money.

People keep saying that productivity will go down will all remote arrangements. But so far assumptions have that company has to worry about it. However I feel once employee/team/projects been identified for low productivity it's them that have to worry. The reason is simple, barring few top percent of employees most do not have any negotiating power on whether to work from home or from office or few days from office to preserve their office seat etc.

So to think that low productivity will bring every one to office seems unlikely.

Managers taking steps to prevent their employees from contracting a disease that will prevent them from working for weeks or months is 'trendy?'

A workplace that's shut down for weeks because of a SARS-CoV-2 outbreak is a workplace that's not making any money. Taking all reasonable steps to minimize employee exposure to infectious diseases just makes good business sense.

Good points! In this case, it has nothing to do with cool and/or trendy, but what is sensible in the circumstances. Still, there might be some companies who pick a certain route just to keep up with Joneses.

Well done, you destroyed that strawman. I totally agree with working from home to minimize employee exposure to infection diseases. Not for profit, but because not getting a potentially debilitating disease at work is a reasonable expectation.

Trendy thing that I referenced was everyone declaring that working form home in new norm and offices are a thing of the past.

There are so many COVID-19 denalists/disinformation sources on HN that it wouldn't have hurt to be clearer about your intentions so you weren't mistaken for one of them.

Why I think offices will just catch back on is because they will come down in price and because those who work closer to the people at the top of the company will be those promoted, this will make the pressure of working in an office greater again.

Maybe this move is also the end of middle management and traditional CEOs?

I hope I’m wrong about office life catching back on because of all the emissions being saved by remote work...

Counterpoint: Most workers get no promotions, they'd be lucky to have a 1% inflation adjustment. They couldn't care less about any pressure to go back to the office.

But every worker wants to be the one getting the promotion.

I'm spending an extra $300-$500 / mo in home office expenses (food, coffee, power, internet, AC, sq footage, etc.) now that I work from home.

I'd love to be back in the office to be near the gym and enjoy the amenities.

Really? What expenses have gone up?

Food? Unless your company provided a LOT of food?

Are you paying more for internet? Paying more for sq footage?

Curious

One obvious expense for me is cleaning.

I used to just be able to go get lunch, and relax / do activities on the weekend and come into a clean office and desk, fresh and ready to work.

Now my house, with my partner and I being in it almost permanently, we make a lot of mess that constantly needs cleaning. I find that gets annoying combined with longer hours.

Because we weren't home much beforehand, the apartment didn't get so dirty and just needed a light clean once a fortnight.

Absolutely this! Takeout containers or food scraps From cooking alone is a huge factor. And before COVID I could just pay someone to take care of this while we were at work, but where do I go now for even half a day? I honestly considered doing day-by-day coworking space rentals which would be an additional expense. Unfortunately my work involves a lot of talking on the phone and getting a dedicated office, even for a day is getting expensive.

Also I think just because we're home more I have more chance to notice what slobs we are. I never noticed our baseboards in the house before wfh but now I look at them every time I'm in the bathroom. They're WHITE!! And they're getting dusty!

Seemingly my sink is never free of dirty dishes no matter how many times I stop in my tracks in the middle of the day and take 10 minutes to do the dishes, breaking all concentration. Everywhere I look there is something to be done. I take a break to piss then see the bathroom is a mess. I go to grab a granola bar and realize I need to take an hour later to go shop at the grocery store, and return to my workspace hungry and defeated. I spend my days alternating between working on the couch and working on the bed, seemingly constantly doing chores around the clock. The list of things to do never ends, I just decide to put most of it off for the day once I'm too exhausted to do any more thinking or spend any more time on my feet. I can't do any deep work anymore with all the shoehorned zoom meetings I have to show face for. I feel more beat at the end of the day than when I was working 50 hour weeks busting ass as a groundskeeper in the hot humid sun.

It's suffocating spending 100% of your time in one place. My apartment feels like a submarine at the bottom of the ocean. My productivity is somewhere down there, too. Despite all this, I drag on, just biding my time for that glorious day when I can get inoculated for COVID.

Re the dirty dishes, one killer way I get around this it to put away everything that I don’t use and only have one of each item I need.

For example I only have one cup, one bowl and plate. If you have multiple items, you generate more mess and are less incentivised to clean things you don’t need.

Is that a time or monetary expense? Are you paying for cleaning service?

(More than you would be for the corresponding takeout that cooking from home is replacing?)

Not OP. There are companies where food is (was) either free or heavily subsidized. For me, fitness expenses went up: I have to pay someone to use their small gym instead of paying flat fee for the chain gym. Car expenses went up, I did not drive to work, and now road trips is one of the very few remaining ways of entertainment. Not me, but some other people had to upgrade their internet connection, buy wifi extenders, and additional monitors (sometimes partially reimbursed by a company). Some had to move to the larger house because they’re DINK and need two offices.

To be fair, car expenses for road trips for entertainment are pandemic costs but aren’t reasonably work-related expenses.

True! I can see a gym membership adding a non-significant monthly expense. Or having to re-locate to accomodate additional working space (rent asides, the cost of moving can be significant). Good insight.

Definitely. Companies are simply externalizing this onto us. My company now occupies about 25 sq ft of my home rent free that I must manage for them.

Wait, so you normally don't have food, coffee, power, or internet at home? you moved into a bigger home to create a home office?

If I had a job (i freelance), I'd still have my office setup, my pc on 24/7, and fiber internet. Still the same $$.. but I never had a place w/ free drinks either, so coffee was on my own dime.... same for lunch/food.

- $2/day snacks

- $4/day coffee (really this should be higher b/c the cafe at the office made expressos that would cost $4/ea at Starbucks and I drink 3 per day)

- $4/day bfast

monthly food total: $200.

I needed to buy a desk ($100), office chair ($80), networking / power equipment, etc (total ~$200).

Studies have shown that sleep quality is very important and you should reserve your bedroom for sleep and sex [0]. If I work 3ft from where I sleep, I never "turn off" work.

So this means I needed either find space in the rest of my house (the kitchen table or rent a larger place).

Assuming I don't want to reduce my quality of life by working WFH, I'm now spending an extra $300/mo on food, equipment, and sq footage. If I was freelancing, I could write off these expenses on my taxes and my prices would reflect these costs. As a W2 worker, I am not able to write off these expenses from my taxes nor have I been able to negotiate better pay from my employer.

[0] - https://buffer.com/resources/work-bed/

I've noticed this as well in the post-covid office life, the leadership team keeps going into work so being in the office is a good way to get noticed and work closer to them.

Maybe it works?

I've noticed this as a senior engineer working for a fully remote organization that I'm delivering more, working harder and longer hours but there is zero talk of me getting a bonus or being promoted. Just more work. I had to start asking questions about it the other day.

This is my second remote job and the same experience. In between my fully remote positions I worked in an office, I was promoted and offered bonuses.

Maybe physically seeing a person working hard used to provoke some sympathy from management to offer promotions and pay rises?

The other thing I've noticed is that it seems now everyone is going remote, people are just working 12 hour days without hesitation. Whereas before, there were hard works and more relaxed types. What excuse does one have not to attend a 6am meeting when "all you have to do is open zoom"?

Do companies you've worked for in the past normally approach you about promotions?

Maybe it's because I'm shy or bad at self-promotion, but I've never had an employer offer a promotion. Even after getting great performance reviews, I've had to fight tooth and nail or go through a promotion committee song and dance that can drag on for months or years.

Most companies I've worked for have just handed out promotions at seemingly random intervals.

You could ask too but it never really went over well.

What I'm usually offered promotion for is having leadership skills. I don't know why or how, but it's something I naturally seem to be complimented and respected for, even though it's only that in the last year I started looking more into what it takes to be a good leader and truly try be better at it.

With fully remote work it seems the concept of leadership is changing and maybe being replaced with...scrum boards? I don't now how it works fully remote yet :) All I know is there are some successful full remote companies, but they don't really have good reviews on their leadership skills either when reading Glass Door.

Yeah I agree it works, I have experienced the same and been on the good side of it in orgs where I got promotions faster than the remote folks.

I'm currently working mostly remote and even though I am in the senior management team in the firm I work for I've noticed people are treating me slightly differently; even though I am sticking to my guns because I am relatively high risk for COVID.

I also let my team decide whether they want to work from home or from the office (as long as they can get to the office without commuting) and I've noticed the more junior people are keen to keep coming into the office.

Where do you live that you can characterize life as “post-covid”. New Zealand? (It is rhetorical - you do not have to answer).

For our company most people are not allowed to go to the office unless they are maintaining servers, facilities, or have to work with the paper trail that cannot be taken outside the office.

I meant it more like "the period after covid started" :)

We are allowed to go to the office in the UK as long as it's been made "covid safe", even though the government recommendation is to WFH wherever possible, it's a suggestion not a rule.

Between promotion and more free time to do side projects, hobbies, families etc which one do majority of people choose?

the one that results in more money I would imagine

I chose to live across the street from the office. Saw it as a way to force work out of my home. If I needed to work, I'd walk over to the office. Obviously not something a lot of people get to do, but it was nice while it lasted!

Wasn't so much of a hard choice as apartment costs are pretty much a constant around where I live. Thanks Irvine area...

Should someone who has to be in the office to have their work noticed be promoted in an organization that depends on remote workers? Do they have what it takes to be responsible for remote works and work smoothly with them? They've self-selected themselves out of that pool, so it's a question worth asking.

I won't be surprised that most companies won't ask it, and thus in-person people will have an advantage, but I still maintain it's worth consideration.

The office is an important persuasion technique. There's a reason why the CEO has a fancy office with a beautiful view that you have to go past 3 tiers of security/admins to get to. It sends a signal to everyone that they should respect this person. It's the same reason you have a shitty low walled cube that you share with 3 other people. It's harder to have that same visual persuasion if the CEO is wearing jeans and a tshirt in his living room on a Zoom meeting.

I think social status signaling still carries over in the age of remote:

CEO (high status) - well lit, high quality camera view of a spacious home with tasteful artwork.

Peon (low status) - dark, lit from above view from a webcam aimed up their nose and background replacement to keep people from seeing the closet they are working from.

> they will come down in price

I hoped they might come down in price already, as I'm looking for an office.

But no. I've been keeping an eye on prices and availability in my area for years. When I looked recently I was surprised to find prices up and availability significantly down.

That is, except for shared office spaces (co-working). There's a lot of those, and I'm not interested.

There is going to be a lot of pain but overall I think this is very good for the economy. Rents that went to landlords will be redirected to more productive purposes (or profit, which when distributed to shareholders will be reinvested).

Wouldn't rents just shift from cities to suburbs, offices to homes/banks.

To some degree. Some people will choose to upgrade their home space--albeit often in less dense locations--but if utilization increases that's generally a win overall.

At least in San Francisco Bay Area, which has one of the worst housing markets in the country, it would be a net win.

For some people who've lived here a while and bought a house for cheap or have rent control, they're making money hand over fist.

But for the rest of us, a huge portion of our paychecks goes to landlords or paying a mortgage. It would be much more reasonable in almost any other US suburb and most US cities.

Technically the rents should go to the employees now devoting parts of their homes (and utilities) to work.

First we started bringing our own laptops, now we're bringing our office.

Sure, there are lots of people who are getting issued a laptop from their employer but there are also a lot of people that don't.

I got an email from my electric utility this summer, pointing out that I was using MASSIVELY more electricity than the same month last year. Like, roughly triple.

When I was at work every day, I had my HVAC on a pretty drastic setback; no sense cooling an empty house. I guess it worked pretty well! Because this year I was home all summer and despite not wearing pants most of the time, it still took a fair bit of power to keep things not-sweaty.

You're right, but I wouldn't hold my breath.

This process is well underway in SF where formerly booming business districts have turned into veritable ghost towns. Winter is coming for commercial real estate.

I'm excited for the Mr Robot-esque urban explorations of these empty business mansions.

They will just flip to housing if they can't find office demand.

Yep. This happened in Calgary back in 2013-16 when oil fell off a cliff and office vacancies skyrocketed. A lot of prime downtown office spaces became either coworking spaces or refurbished into luxury apartments.

This works well for people who already have a social network at their job. Very challenging to build relationships in a zoom environment, feel bad for all the new folk at their jobs.

well we lost most of our contractors when the pandemic hit but the new move has been to outsource and starting with support groups. since they own their buildings it may not be as simple to dispense with the added space but this does not mean they cannot simply shut down entire floors to save money.

The fallout people keep missing is the loss of tax revenue. Either the direct property tax as values drop to in some cases income taxes shifting to other locales. Throw in the reduction in spending at local associated businesses like restaurants and stores which also results in lower sales tax revenue and eventually staffing. It is quite the cascade effect that will happen.

Yes, this knock-on or 'domino' effect is severely underestimated.

A lot of modern urbanites are probably too young to remember just how bad a lot of American cities were in the 70s/80s. A city like Boston was still losing population well into the 90s. It wasn't just Detroit. It would be very easy for the relatively recent urbanization trend to reverse for another generation or more.

> The fallout people keep missing is the loss of tax revenue. Either the direct property tax as values drop to in some cases income taxes shifting to other locales. Throw in the reduction in spending at local associated businesses like restaurants and stores which also results in lower sales tax revenue and eventually staffing. It is quite the cascade effect that will happen.

I think we might see the opposite in some subset of small towns - probably the ones in and around areas of natural beauty, or hot-spots for hobbies like rock climbing or skiing. I'm guessing some places are small enough that it wouldn't take a huge number of well-paid remote elite moving in/nearby to boost local government coffers, and possibly make some businesses viable that weren't before.

Good point. A downturn in the urban center could very well mean a boon for other neighborhoods. I'm imagining a place like Arcata, Ca would become more desirable than living in the Bay Area for a professional, so they move. Sure, it means the coffee shop across the street from their old downtown office closes, and someone in their early 20's cant find work in SF. But then that young person moves back to Arcata. They bring their indie band and contribute to the local culture. Having graduated few years later that young person runs into that same professional from across the street, they get around to talking and find a shoe in the door at that same formerly impenetrable wall of glass on the Bay's skyline. The downfall of the urban center isn't necessarily a bad thing if it means the economic and cultural boons of city life are spread to other wanting communities.

A lot of commercial properties are not owned by the companies residing in them, but property holdings firms that have owned them for decades. And/or business people who bought in the right place at the right time lol.

The property tax laws in California that benefit long time homeowners also benefit long time commercial property owners. In California, if proposition 15 passes AND a ton of companies stop leasing space, a lot of those firms will probably have their arm twisted enough to sell the properties. That will lead to a lot more property tax revenue.

That, or the commercial properties get torn down and replaced with residential properties.

Or none of the above and California becomes like Detroit, as some people in another thread predicted, lmao.

Conversely, our CEO signed a five-year lease last year and is trying to get everyone back in the office under specious pretenses. Always ask for a force majeure contract clause!

Heh, I get the sense I know who you work for...

Favorite recruiter pitch: "And they have that trendy open office space layout!"

I mean, where does the conversation go after that?

"Thank you for your time."

Whats happening at Apple's spaceship? Is it empty? Can I squat there?

It's always mostly empty, and that's by design.

Remember when Eric Schmidt thought COVID-19 was going to increase demand for commercial real estate?

I've never been a big proponent of remote work. I've always had bosses who were "butts in seat" (with accommodations every now and then) and that's how I've always been. But the past 9 months I've been working from home and I've enjoyed it. But as soon as the vaccine is widely available and I've taken it, my butt will be back in my office seat, provided it's still there.

Provided the company you work for still exists. In your case that might be a given but overall I think the coming six months will be written about in history books a century from now. Of all the crises that I've seen in my life to date (Oil crisis (73), black Monday (87), .com bust (2000), Global financial crisis (2009) and this one I think this one is by far the most disruptive and serious. We'll see how it plays out but so far the experience here in NL is absolutely surreal. And the worst is yet to come by all indicators.

The worst in terms of health or financial effects?

all those are financial, so i would assume financial.

Very likely both.

I'd love to hear your precise rationale on the financial side.

The real hit to the ecomony will happen next year, when fiscal 2020 is closed and cards are on the table. So far, everybody is still rolling on 2019.

It will be tough.

Massive increase in unemployment, massive subsidies required to keep companies afloat, a smaller tax base to support it all. Entire industries that will no longer be able to recover if this lasts > another 6 months (and it likely will). Travel, leisure, festivals, conferences, hospitality, and all of their supply chain as well as infrastructure providers (for instance: air plane manufacturers, vehicle manufacturers) will be hard hit. This will cause a recession that it will be very hard to rebound from.

What most of the population doesn't realize: There is no such state of "it being over".

I mean, human rights prevent forcing people to vaccinate. Especially given the facts that there was/is no time for a standard timeframe of human trials and verification of a potential medication.

The next decade will be very, very challenging for all of us. And mostly because of the stupid ones that insist on going to their effing vacations.

The question of vaccinations is very interesting. I'm curious which countries the employer can legally require it and which they can't.

*edit - make clear the legality I'm talking about is wrt the employer.

More downsizing. Where will it end? An office for ants? How can we expect workers to labor if they can't even fit in the building?

But why male models?

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