In August 2021, Facebook (Meta) to showcase their VR virtual world Horizon Workrooms, office workers remotely participate in work, networking and meetings, and have access to virtual avatars, computers, desks and chairs... This is undoubtedly another new imagination about the form of remote work.
Covid-19 has made home and telecommuting mainstream, with an explosive increase in traffic to office SaaS software including Zoom, Teams, Slack, and more. Microsoft, Google, Facebook and other large companies not only actively advocate the benefits of remote work, but also actively invest in the layout, as if it is an extremely optimistic situation.
However, actively promoting the other side of online office, the Silicon Valley tycoons of "chicken thieves" have not stopped buying land and renting buildings to expand their new offices during the new crown: Google, Amazon spent billions of dollars, and Facebook expanded its office space by hundreds of thousands of square meters.
In addition, although the "back to office" date has been delayed, technology companies are still happy to update the specific schedule of offline work. According to the latest schedule, starting this week, employees of companies such as Apple and Google must return to the offline office one day a week, and this number will become 3 days a week next month.
Say well together to work remotely, why do the giants keep buying land and renting buildings? Is it another "insincere" story? The answer may be more complicated than you think.
Buying land can't stop
On 14 January 2022, central Saint Giles Tower in London's West End announced a $1 billion bid for the largest office deal ever in the district. The new owner of the colorful, 400,000-square-meter property is Google.
In addition, Google is building a new headquarters on King's Cross Street in London, and if you add offices elsewhere in the UK, the transaction will allow Google to accommodate 10,000 employees in the country.
Google's big spending in the field of office real estate has not stopped. Last March, Google announced plans to invest more than $7 billion to open new offices and expand data centers across the country. In September, Google broke the record for the most expensive single office building in the United States since the pandemic, acquiring the St. John's Wharf office building in Manhattan, New York, for $2.1 billion, which is scheduled to open in 2023. By then, Google will have more than 3.1 million square feet of office space in New York.
It's not just Google that's spending a lot of money on buildings. Last April, Apple also unveiled an investment plan for the U.S. over the next few years, involving up to $430 billion, including the opening of a new campus in North Carolina, which is expected to cost $1 billion. Apple intends to have 3,000 employees here, responsible for machine learning, artificial intelligence and other related work.
Amazon has not stopped expanding during the epidemic. In 2020, Amazon purchased the Lord & Taylor Building in New York for $978 million, with an office space of 660,000 square feet (about 61,300 square meters), which was intentionally purchased by weWork, a once-glorious co-working space standard-bearer, for $850 million in 2019; the same year, Amazon announced three new offices in Alberta, Canada, for about $120 million; in addition, Amazon is preparing to build three new offices in New York, Phoenix, and San Diego 3,500 corporate jobs were added to the new offices in Denver, Detroit and Dallas.
Even Zuckerberg, who has been particularly aggressive in promoting telecommuting, is aggressively expanding its office footprint, and in 2020, Facebook (Meta) not only leased the 107-year-old James F. Kennedy in Midtown Manhattan. All of the office space at the James A. Farley Building has been disposed of in Austin, Boston, Chicago, and Washington.
According to CBRE, the technology sector leased 76 percent more office space than it did a year ago in the last three quarters of last year, and has been a major force in Manhattan's office rental market for several consecutive years.
If they are not familiar with the above companies, the people really think that they are going to devote themselves to real estate.
Giants' Bets and "Self-Help"
Why are the giants buying land? The most direct answer: there is money.
According to the global corporate cash reserve ranking released by financial data company FactSet in mid-2020, the top rankings are still those familiar names: Microsoft holds the most cash of $136.6 billion, Apple, which has been at the top of the list, has retreated to fourth place, with cash reserves of about $100 billion, Google's parent company Alphabet has $1200 cash reserves, Facebook and Amazon hold $5.3 billion and $4.3 billion, respectively.
In the context of global flood irrigation, instead of devaluing the real money and silver in your hand, it is better to look for high-quality target investments. Especially during the outbreak of the epidemic, the asset prices of office buildings have fallen, and at this time, the bottom of the shot, even the A-share xiaobai feels that it is a sub-topic, not to mention the wall street wolves that have been around the giants for a long time?
Apple took Down Building 3 (1 from left) | Macrumors on Metlife's North Carolina campus
As the market picks up, the price of commercial real estate assets in the United States is also rising, and some analysts expect that in the first half of 2022, the average return on capital (Average Cap Rate) of all types of commercial real estate is expected to be 2.8%-3% higher than the yield of 10-year Treasuries.
Of course, to say that the Silicon Valley elites are speculating on real estate, it must be that the pattern has not been opened. Giants gamble big — betting that the global pandemic will stabilize in the past two years, and when the economy picks up, it will inevitably need more employees and more offices — in fact, they do the same: starting in 2020, Amazon has embarked on a crazy expansion model, according to CNBC, Amazon has added more than 400,000 employees in 2020 alone; Google accelerated its hiring progress last year, planning to expand by 10,000 employees; Apple's local investment plan revealed that it will create 20,000 jobs in five years.
Of course, more importantly, although remote work is convenient, various flaws are gradually exposed:
Work and life are blurred
Although professionals enjoy the moment of laziness and fishing, it may also make you feel like you are in the company at home: a workplace report released by Microsoft at the beginning of last year showed that 54% of people said they were "overloaded", and 39% felt "tired" because of work. More than 60 percent of calls and meetings on the Teams platform were "ad hoc" outside of the plan, and employees faced a massive bombardment of various web conferencing and text messages, the report said.
Communication efficiency issues
Telecommuting without the annoying part of a nine-to-five or even 996 job can also make you lose the good part: face-to-face interactions among colleagues, small talk in the hallway, gossip in the pantry — these are all key elements for workers to build meaningful relationships and strengthen their communities. In the new office model, this familiar set of interpersonal rules needs to be broken and restarted.
For managers, face-to-face communication is an important basis for building team connections, and bosses are also worried about not being able to control the work status, process and efficiency of employees - which can also explain why so many third-party supervision tools are selling; for the workplace rookie, the lack of communication experience makes it more difficult to find a foothold and grow in the workplace.
Specific work scenarios remain important. Google's CFO noted that while the company has shifted to a more flexible hybrid office model, having employees personally come together to collaborate and build a community of work remains an important part of the future.
Mary L. Gray and Siddharth Suri, in their book Ghost Work: How to Stop Silicon Valley from Building a New Global Underclass, conclude that online work has spawned gigs who pick up jobs on internet platforms. With no fixed office location, it is often easy to fall into helplessness and become atomized personal and assembly line procedures, and the meaning of the work is reduced to a remuneration.
A background that needs to be added is that the "Great Resignation" era (Great Resignation) in the United States since the outbreak of the epidemic is falling, and the US Labor Department recently disclosed that the US unemployment rate fell sharply to 3.8% in February this year, and the number of new jobs in the non-agricultural sector was 678,000, which was better than market expectations.
As more and more labor enters the market, companies that are fed up with the pain of recruitment due to the epidemic have naturally expanded their offices and hope to resume offline offices as soon as possible.
Twitter announced that it will fully reopen the office from March 15, Facebook has set the latest date for March 28, Apple employees will return to the office on April 11, and Google plans to pilot in April and promote it widely in September.
New trends in the office
The return of employees to offline is inevitable, and the exploration of telecommuting will not stop, whether online or offline, the epidemic and mobile technology have profoundly changed our work patterns, and hybrid office is becoming a mainstream trend.
CBRE's research shows that workplace flexibility will be more embedded in the company's business model, with U.S. office employees spending an average of 24 percent less time in the office, and according to its 2021 Tenant Sentiment Survey, 87 percent of large companies plan to adopt a hybrid approach — employees return to the office a few days a week and have the option to work from home at other times.
Although the tech giants have invested heavily in buildings, the new office space is no longer similar to the previous "office", but has a new change: no longer focus on workstations, but emphasize more space such as lounges and conference rooms, mainly for team communication:
Google says it sees the office as a "place for collaboration and meaningful employee connections" and expects to invest millions of pounds to renovate the new office tower in London;
Dropbox converted its existing workspace into a flexible co-working space, Dropbox Studios, which is primarily used for team building and collaboration, rather than "just working";
Salesforce has set up a new Trailblazer Ranch resort office park in California's Redwood Forest, covering an area of 75 acres, where employees can work, study, and build groups, as well as take nature walks, meditate, and take yoga.
Decentralization has spread to the workplace, and businesses and employees will not have to concentrate on the core areas of the core cities. One notable change is that tech giants are no longer piling up new office opportunities in Silicon Valley, Tesla, Oracle, and Dropbox have moved their headquarters to the Texas city of Austin, Apple has seen North Carolina as a new investment focus, and Amazon has blossomed in places like San Diego, Denver, Detroit and Dallas – new work models that make tech companies more flexible in office location and manpower allocation.
Since the new crown epidemic, after two years of "running-in", people have also explored the "comfort zone" of online office. Online office has become more focused, reducing unnecessary meeting procedures and leaving more Solo space for employees:
Salesforce lets employees set Focus time on Slack status to prove they're focused on their personal work, Connecting says they can meet at any time; Salesforce tries a 20,000-person "asynchronous work week" to cancel weekly fixed meetings, more than 70% of employees say they are more efficient and less stressed; Twitter experiments with "focus week" to cancel meetings so employees can focus on their tasks...
Google employees will return to work for at least 1 day this week, and that number will become 3 days by next month. Google CEO Sundar Pichai believes that "it makes sense to get people back to the office every week" and that the time to return to offline work can be "more purposeful", allowing the team to better integrate and "brain storm".
"I believe the team will come up with their own approach, and in general, I am hopeful about rethinking the next decade."
Returning to the starting point of the question, the choice of offline or remote work is not at the heart of the matter, but at the core that we (including businesses and employees) need a freer and more creative model for arranging work, which is not only a realistic requirement, but also a meaning: technological progress should create a better life for people, not the other way around.
Image source: Visual China, Pixabay