Google's Blockbuster Work From Home Announcement

Mish

Google made a major announcement that will impact 200,000 employees.

In the first announcement of its kind, Google to Keep Employees Home Until Summer 2021.

Google will keep its employees home until at least next July, making the search-engine giant the first major U.S. corporation to formalize such an extended timetable.

The move will affect nearly all of the roughly 200,000 full-time and contract employees across Google parent Alphabet Inc., and is sure to pressure other technology giants that have slated staff to return as soon as January.

Alphabet Chief Executive Sundar Pichai made the decision himself last week after debate among Google Leads, an internal group of top executives that he chairs, according to a person familiar with the matter. 

“I know it hasn’t been easy,” Mr. Pichai wrote in a note to staff Monday, after The Wall Street Journal reported the impending extension. “I hope this will offer the flexibility you need to balance work with taking care of yourselves and your loved ones over the next 12 months.”

What Other Companies Are Doing

Work-From-Home Lessons

The Google announcement adds emphasis to WSJ report The Work-From-Home Shift Shocked Companies—Now They’re Learning Its Lessons

Despite its speed, we’re still in the earliest stages of the Work-From-Home Revolution, and it could take years or even decades of trial and error to get right.

The number of Americans working solely from home has at least doubled, and possibly tripled, since before the pandemic. At its peak in early May, 52% of employed Americans reported always working from home, and another 18% reported sometimes working from home, for a total of 70%, according to a survey by polling firm Gallup. That represents more than 100 million people in the U.S. alone. In the week ending July 12, the total declined to 53%. Even that is significantly higher than the 43% of workers who reported working from home at least part time in 2016, the last time Gallup asked Americans about their work-from-home habits.

The Next Normal

Gallup explains How Coronavirus Will Change the 'Next Normal' Workplace.

In three weeks, the percentage of employees working from home doubled, from 31% to 62%. Some jobs were already set up to work from home, others were configured to work from remote environments part of the time, and still others had to transition quickly and completely from 0% to 100% remote.

Even the NFL commissioner and coaches worked from home during the draft this year, with some claiming significant benefits to their wellbeing.

Employee Perspective

Employee Perspective on Work-From-Home

Enormous Impact

Work-From-Home is here to stay with major consequences. 

  1. Companies need less office space and less furniture. 
  2. Less air travel
  3. Fewer hotel stays
  4. People who work at home will eat at home, not go out for lunch

Companies were forced into this setup but it is here to stay. 

In addition, mask requirements (who likes wearing them?) will have more people shopping online. The online shopping trend was already in place, but Covid accelerated it.

Add it up and there are more fast food restaurants, malls, airplanes, etc. than we need.

More Than Half of Business Closures are Permanent

On July 22, I commented More Than Half of Business Closures are Permanent. 

A friend challenged, these closures will reopen under another owner or name following bankruptcy.

Four Questions

  1. Will they?
  2. With as much business as before?
  3. With as many employees?
  4. In what timeframe?

Work-at-home is here to stay and so are the impacts, especially office space and commercial real estate. 

In addition, many millions who cannot work from home are in serious trouble with a loss of job or reduced hours.

Mish

Comments (51)
No. 1-26
Zardoz
Zardoz

Must suck to be an oil producer about now, to say nothing of the angst of purveyors of commercial real estate...

tokidoki
tokidoki

Not sure what "major" means, but Twitter said that people can work from home forever sometime back in May 2020.

Speaking about Google, they were supposed to acquire a ton of real estate in San Jose. I wonder what will happen to that.

PecuniaNonOlet
PecuniaNonOlet

Very timely post. I just received those vacuum pack bags. I am going to put all my business clothes in the bags for long term storage and clear space in my closet. Same with shoes, ties, etc. I wont be buying any more biz or biz casual clothes for a long while now. No more biz. lunches, hotel stays, car rentals, drives to office and on and on.

Webej
Webej

This will accelerate the trend to piece work instead of a salary, without secondary benefits or a contract. Piece work rarely pays better. More deflation. Labor share of GDP will drop further. Fewer jobs in the service sector will accentuate the trend.

njbr
njbr

Work from home?

Home can be anywhere in the world.

Let's say that your employer has your corporate account shadowed by a trainee making a $80/day, in say, India. They see, over a period of months, what you do and how you do it.

One day you try to log in, and it says "access denied".

The world is a big place, full of smart people anxious to earn a living.

Jojo
Jojo

This is great! We get less traffic here in the SF Bay Area and the air stays cleaner. Let's start converting office buildings to apartments.

Tony Bennett
Tony Bennett

If you open your window ... you can hear the scream of CMBS holders ...

Not to mention that commercial RE loans bread and butter for mid size (ie: not too big too fail) banks balance sheets.

Tony Bennett
Tony Bennett

Allows workers to flee urban areas. Rents will crater there. But will Larry Yun EVER mention that point when waxing on how home sales (in rural areas) are rising??

AbeFroman
AbeFroman

Have any of these companies disclosed what the financial impact will be? I would think they’re passing along a fair amount of electricity cost to their employees, offset by lower transportation costs. Lots of knock-on effects if permanent.

Anda
Anda

Spain just suggested the same for British tourists, the government saying circumstance/virus/new quarantine for those arriving to UK from Spain would "in a certain way favour us because it provides disicentive that people come from the UK".

Visit from home if you are able to ? The irony is that they are making out that tourists spread the virus, but the new outbreak in Spain is not from tourists as far as I know. So they are just thanking the epidemic for keeping Brits away . A lot of Spanish are shaking their heads at all this, and UK extended the quarantine to Canarias and Baleares.

Stuki
Stuki

Anecdotally, it seems half of $5K/month-rent-for-300sq/ft-in-San-Francisco software guys, are on their way to Bali or elsewhere in Asia....

magoomba
magoomba

Those abandoned offices, malls, and stores can make dandy homeless shelters.

anoop
anoop

Look at the positives -- bullish FANGMAN + BLK.

magoomba
magoomba

200K employees of dubious value, all nonessentials, will no longer have to clog the highways with their miles of smog spewing metallic snake slithering daily in and out of the dying cities. Soon to be replaced by AI anyway, and ready to assume their rightful place at the bottom of the food chain.

magoomba
magoomba

They can rake the woods and plant gardens now!

WildBull
WildBull

Look at the death rate chart for Sweden. They are DONE! Masks are promoted in the US to hide the fact that the US is mostly done in the North and a little behind that in the South. Covid is real, but not near as bad as the fear mongering assholes pretend.

KansasDog
KansasDog

So if there are many millions that cant work at home that are going to lose a job or get reduced hours.........wont there be less people working from home as well? Why would we need the same amount of products and services?

Jackula
Jackula

Mask requirements for shopping? Bigger reason is physical shopping in stores is one of the better ways to catch Covid...at least in my part of Los Angeles...

Felix_Mish
Felix_Mish

As others have noted, if you can work from your home, you can work from Timbuktu.

This all gets to a massive change humanity is going through right now, as we speak: The cultural, power, and utilitarian split between people who are bound by geography and those who are not.

The overall trend for humanity is toward the latter.

The former, unless freed by telepresence robots, will be tied to geographic entities: nation states. The latter ... not so much.

Look for a lot of silliness and horror. Most of us are genetically adapted to farming. We are territorial to an extreme. We'll continue to feel territory is important long after it's not.

Casual_Observer
Casual_Observer

Coronavirus is actually good for companies efficiency. They will quickly find out that employees with no kids at home are the more productive employees. This will allow them to let go employees based on pure productivity. It will reduce their health insurance bill because employees who are more productive from home will be less stressed out by an office environment. I expect covid to cause huge amounts of long term unemployment as companies root out the dead weight.

Casual_Observer
Casual_Observer

Just returned from Muir Woods and Pt Reyes. Less people because more planning is mandatory going to both places. Even well to do places in Sonoma and Marin county are dying a small business death.

RonJ
RonJ

"In addition, many millions who cannot work from home are in serious trouble with a loss of job or reduced hours."

In addition, the jobs of how many working from home are in trouble, due to the fact that others who cannot work from home have lost their job and thus are placing economic pressure on companies such as Google?

MarkUltra
MarkUltra

How do you guys feel working remotely? At first, I liked the opportunity to work in a pajama having a dog next to me. But then I realized that I am sitting at home all my time. No aport, just food only and TV in the evenings. That was terrible. I've read this article to understand the difference between an expat and a digital nomad. Now I think I need to change my lifestyle.

MarkUltra
MarkUltra

How do you guys feel working remotely? At first, I liked the opportunity to work in a pajama having a dog next to me. But then I realized that I am sitting at home all my time. No aport, just food only and TV in the evenings. That was terrible. I've read this article to understand the difference between an expat and a digital nomad. Now I think I need to change my lifestyle.

MarkUltra
MarkUltra

How do you guys feel working remotely? At first, I liked the opportunity to work in a pajama having a dog next to me. But then I realized that I am sitting at home all my time. No aport, just food only and TV in the evenings. That was terrible. I've read this article to understand the difference between an expat and a digital nomad. Now I think I need to change my lifestyle.


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