Leaked Zoom all-hands: CEO says employees must return to offices because they can't be as innovative or get to know each other on Zoom
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Leaked Zoom all-hands: CEO says employees must return to offices because they can't be as innovative or get to know each other on Zoom::Zoom CEO Eric Yuan discussed the benefits of in-person work in a leaked meeting.
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It's not about improving productivity, increasing innovation or 'sharing best practice', as a former workplace put it. Corporations are forcing a return to office work in an attempt to curb a post-COVID real estate crash - which we honestly need since we have far too many luxury offices being built and not enough homes.
For one place where I used to work, RTO drove down staff morale to an all-time low (already low due to high workloads and bad wages) and pushed the staff turnover rate in my department to 95%. They ended up having to outsource the function to an overseas firm.
Geez sure sounds like this real estate market should be like. Heavily controlled and limited by the government. So that objectively good things, like less daily commuting and therefore less greenhouse emissions, can happen without toppling society.
I will never work in an office again. I literally couldn't afford my rent and my food costs if I also had to afford a daily gas expense. I am very much not alone in this.
This is a stupid question maybe, but how does a real-estate crash topple anything?
There's over $1.5 trillion in commercial real estate value that's spiraling in value due to numerous factors, but so many offices going fully remote has definitely contributed to an non-insignificant degree. Additionally, many cities/counties get a shit ton of their tax revenue from the property taxes on that same commercial real estate. If the value of those properties plummet, then tax revenue also plummets. Then you also have a lot of commercial real estate investor that foolishly over extended themselves over the pandemic by buying up a lot of shit when some loan rates were almost 0% at one point. Now, those investments don't look so hot and they're massively in debt and at risk for faulting on those properties.
Tldr; from on my understanding, it's sorta like the 2008 subprime crash, but with commercial real estate and different circumstances.
That being said, fuck those investors and fuck cities heavily relying on property taxes for the bulk of their revenue. Teach them all a lesson, just like they'd unsympathetically teach us common folk a lesson when we fuck up
the same local governments that just raised my property tax by $190/mo?
Go to elec. If there are no good candidates - be good candidate.
I've got a full time job and kids. Don't have time to also get into politics.
I've been to the city council meetings and I vote. Nothing seems to change
The real estate market is in shit because it is already heavily regulated.
Yes... heavily regulated... thats why an entire generation of people live with their parents because housing costs are many orders of magnitude too expensive for them to afford. Yup. That's a clear sign that the government is putting heavy regulations on the cost and distribution of real estate.
I'm sorry, but the very premise that in our present society real estate is even lightly regulated is utterly ridiculous on its face value. As is the concept that deregulation will make housing affordable. Letting landlords and capitalists do whatever they want with all property will somehow make property cheaper? People motivated solely by profit will make everything cheaper? No, they will continue to sell property at increased costs so they can increase their profits as they always have.
You have no clue what zoning does to buildability, do you.
Hint: insane ass zoning rules are government regulations. You really want revised government regulations.
Zoning is not federal in US
And way up this thread was referring to localized laws. And you can force certain changes at higher levels, just gotta be prepared for the lawsuit that follows. State of NJ having a huge issue with affordable housing, and Fair Share basically taking a court ruling and running with it and essentially forcing towns to build, or else.
Or Newsom just flat out removing zoning restrictions via state law in Cali.
What a Chad.
All people who think more gov controlling everything should do is look at places like Europe where it's basically impossible to build and family homes are generational things handed down and you live with your parents until they die and hand over the home to you
"look at places like Europe" is the clearest signifier of someone who has never left the States ever in their life.
In Europe, there are 50 countries, over 150 distinct cultures, wildly different economies and styles of government representing each country, and over 746 million people living within European borders. Of those 746 million, 70% own their own home, compared to 65% of US Americans. Your generalization is absolute nonsense and you should probably not respond so confidently with your opinion.
ROFL, my family is from multiple countries in Europe. I've lived in there for multiple years and my wife is from there. I know all about it because I've lived it. You're a fool if you think people can just own homes or build houses there easily. The home ownership is handed down and most live with parents.
Hell it's not hard to even find this shit out:
https://www.theguardian.com/society/2014/mar/24/dependent-generation-half-young-european-adults-live-parents
"Europe" isn't just London and Paris. I did some research on real estate in France and Spain recently and it's significantly cheaper over there if you aren't living in a major city. Even cheaper than the rural area in the US I currently live in.
No shit...this happens in small towns as well. I would know my family is from multiple countries in Europe.
They're cheaper sure, but you also make far less than in the USA.
Yeah you do, but the housing was way more affordable at the same time. You can still make good money in Europe depending on what you do. In the US your income also gets reduced by things like heath insurance that are much cheaper in the EU even including the taxes. And groceries are cheaper in Europe as well.
That's absolutely not true where I live, so maybe be careful with the generalizations.
Where do you live, because a huge number of families do live in multiple generation houses.
https://www.theguardian.com/society/2014/mar/24/dependent-generation-half-young-european-adults-live-parents
Regulation doesn’t automatically mean better.
You can make regulations that benefit large real estate corporations and that’s still regulation.
We have a lot of that in the parts of US. There are rules encouraging landlords to keep high rental rates bc if they lowered it, they’d have to offer that to other renters as well. Many landlords choose to have empty rooms and keep that high rental rate.
This is literally why housing is so expensive. Local governments (or worse, federal), pass stifling legislation that prevents building, almost always due to localized pressure.
Meanwhile in Russia there is opposite problem: too much housing. And there are a lot of regulations.
And all of those regulations are extractive, but in the opposite direction
Well, I don't know where you live and maybe in your country nothing is regulated, but I live in Europe and in most European countries there are excessive building regulations which prohibit new developments. This results in severe stock shortage. And shortage drives the prices up. That's just a fact.
The whole problem is created by the government and they're the only ones responsible.
I live in Copenhagen, and there are new developments going up every day.
Well, good for you.
The point being that Denmark also has regulations...
Regulations can be different. Some regulations state what the quality of the building should be, but some state that developers can fuck off.
"Stock shortage", lol. Not enough paper being printed causes prices to go up?
I think he meant it as inventory
Ah. Well, we live on different planets. On my planet new appartment costs less than on secondary market. And there is oversupply of housing nobody knows what to do with it.
Dear god you are the poster child for "confidently incorrect"
Are you really that ignorant of the housing market? Zoning regulations are the #1 blocker for new housing being built. More regulation = less housing. Just think about it for half a second.
Also, more housing = lower cost. Supply and demand, dude.
I'd argue it's more the homeowners themselves. They don't want high density housing built near them because it drives down the value of their house, so it doesn't get built. Voting records tell that story extremely well.
You'd be wrong. Local homeowners don't vote on new construction. That's not how any of that works.
Homeowners absolutely have a say in their local elections, and there are many cases where they've directly prevented projects from moving towards.
...by convincing regulators
Local homeowners vote on zoning policy tho so he's basically being correct, just not about the mechanism.
Local homeowners typically vote on representatives who then set local zoning laws. But either way, guess what that's called? Yep, regulation.
You’re not wrong, but I feel like this is an over generalization. You’re right that the current housing shortage has been caused largely by local regulations. On the other hand, many state legislatures are realizing this fact and working to craft new regulations that loosen and supersede the local ones. E.G Oregon passed a law a few years ago that requires residential areas to be zoned for multi family units in cities over a certain size. I think that kind of law is going to be pretty important to getting the housing situation under control.
That happens only in US. Well, you can say that US is more regulated that EU. And then think about it.
US is actually over regulated in general. It's just that their regulations are a result of corruption (they call it lobbying) and are tailored towards protecting monopolies and not consumers or competitors.
Why would companies that generally avoid owning real estate act against its own self interest for the profits of real estate companies?? I don’t see the connection.
I agree with this, the theory doesn't track very well unless the executives locked themselves into expensive long term leases for their offices and don't want to feel embarrassed that it's a wasted cost.
I think the more likely explanation is that the companies want to drive people into quitting so they can reduce payroll without being on the hook for unemployment insurance.
This is exactly what happened at Alphabet.
That’s false. They were not locked. They publicly announced they paid the fines to end those leases early. I think people are just sharing feelings and not facts here.
If they paid fines to cancel, then they were locked in. But they were sensible enough to not fall for sunken cost fallacy and formed up the extra money for the fines to break the lease. Most companies aren't so forward thinking.
That’s a semantic distinction that makes no difference for their incentives. They are not feeling any pressure that affects their decision making in this regard anymore. That was the original argument.
Lots of companies and executives invest in real estate. They see their holdings dwindling and decide its time for the unwashed masses to get their asses back in the office
there might be exceptions. but as a rule tech companies AVOID investing in real estate.
Corporations are pushing RTO because their senior leadership doesn't know how to lead in a modern system.
I won't argue some amount of "responding to waste" isn't there, but this "problem" only exists when the culture isn't healthy enough to be properly managed remotely, which frankly is not that hard.
This has always been the method. I've worked in startups for years, and there's always a game-changing pivot that causes a staff exodus. They replace the with contractors until the company succeeds in the pivot or crashes and burns.
Return to office is just a pivot. If the talent leaves and gets replaced, hopefully their leadership can right the ship. Otherwise it's those who departed who made the right call.
"Oh no, how terrible"
Sounds like their reason behind implementing the RTO plan was successful then.
People keep bringing up real estate because everyone thinks the rich are evil and this move must be money related somehow.
Now, I too think they're pretty rotten for the most part.
But returning to office is not about real estate.
Companies are ruthless and if they can increase profits at all, they will do pretty much anything to do so. Firing long-time workers, destroying the planet, etc. So if they had to destroy the real estate market to make more money, they would.
My point here is that if it was just about money, everyone would remain WFH. They could downsize the office, or even lease out the space to the companies that are returning to the office.
So then why are they doing it? It's their preference. They prefer having their underlings in the building and enjoy seeing everyone from their corner office. They like feeling powerful which is harder to do when everyone who works for them is at home.
They might also have the kind of personality where they get more work done with others around, and they can't imagine it being different for other people. Many high-up executives only got that far because they have very extroverted personalities.
Not everything a rich person does is strictly about money. Otherwise they wouldn't buy mansions, supercars, private planes, etc. Apple wouldn't have built the billion dollar donut office. They do these things because they're powerful and want others to know.
Or, it's a combination of numerous factors, including commercial real estate. There's no one single explanation that fits for every company reverting WFH.
It's not commercial real estate. There's no reason for a CEO to care about real estate. This is just the reason given by people who believe all companies only ever do things for the money. So they've made up a reason they think fits.
It's a combination of factors with real estate being a key I've. Don't be so naive.
Why would a company care about the real estate market when it can make more money having its staff work from home? Have you ever seen a company care about something that doesn't benefit them in the short term?