|
|
Facebook, the social media giant, announced Thursday that it will delay the return of its U.S. workforce to offices until January 2022 due to “recent health data showing rising COVID cases based on the Delta variant.”
“We expect this to be the case for some countries outside of the U.S., as well,” the statement from the company said. “We continue to monitor the situation and work with experts to ensure our return to office plans prioritize everyone’s safety.”
The Trends Journal has reported extensively on how companies in various sectors have differing approaches to bringing employees back to in-person work. (See: “AMAZON PUSHES BACK RETURN FOR ITS CORPORATE WORKERS, BUT THOSE AT FULFILLMENT CENTERS MUST REPORT TO WORK,” “OFFICE WORKERS’ SLOW RETURN ENDANGERS LANDLORDS, CITY FINANCES.”
We named the work-from-home shift in the U.S. a “21st CENTURY MEGA-TREND,” and noted that the Bankster Gang, such as Goldman Sachs, JP Morgan Chase, BlackRock etc., have been the most vocal in pushing workers to return to offices because they hold billions of dollars in debt and/or own commercial real estate.
Tech companies have largely taken a different approach on the matter. On 15 June, in an article titled, “FACEBOOK: EMPLOYEES CAN WORK FROM HOME FULL-TIME,” we reported that Mark Zuckerberg, the Facebook CEO, said many of his 60,000 workers, who have been working from home, will be able to do so on a full-time basis.
“We’ve learned over the past year that good work can get done anywhere, and even more optimistic that remote work at scale is possible, particularly as remote video presents and virtual reality continue to improve,” he said.
Contrast that to James Gorman, the CEO of Morgan Stanley, who told his staffers in New York that they better work at their desks if they want to “get paid New York rates.”
Bloomberg reported earlier this month that two vaccinated employees at the Morgan Stanley office in its New York’s Times Square headquarters came down with the virus. The bank has not set a firm deadline for a return.
The New York Times reported that there also seems to be less interest among college graduates to start a career in investment banking, which can offer starting salaries of up to $160,000 a year.
“The sleep deprivation, the treatment by senior bankers, the mental and physical stress… I’ve been through foster care and this is arguably worse,” one analyst told the paper.
TREND FORECAST: The more people who work remotely, the further commercial real estate prices will fall. In turn, businesses and transportation systems that relied on commuters will economically suffer, as will the workforce once employed in those sectors.
TREND FORECAST: Fighting the Delta variant will keep more people working from home which will also put more downward pressure on the commercial real estate sector. Indeed as we had reported, JLL Research reports, Gross leasing activity “is still 41.6% below the pre-pandemic quarterly average, underscoring the road to recovery for office leasing fundamentals.”
This will in turn put more pressure on big city real estate. As we have forecast, Commuters will return to office centers, but not in the numbers that can support the pre-2020 economic ecosystems that depended on them.
With fewer commuters, there will be fewer cafes, restaurants, office-wear stores, and other retailers, leaving building owners competing to fill empty spaces by slashing rental rates, offering more generous allowances for remodeling or decorating, or agreeing to accept a percentage of sales as rent payment.
We again refer to a Fitch Ratings study concluding that if companies surrender 10 percent of their office space as workers remain at home at least a portion of the time, the value of office buildings could plummet as much as 40 percent.
A crash in property values will, in turn, crash city budgets, leaving cities unable to fund past levels of services in police protection, firefighting, education, and trash collection, among others. (New York City gained 40 percent of its pre-2020 revenues through property taxes.)