Hybrid Work Makes Amazon, Meta, Others Reevaluate Office Expansion Plans (reuters.com) 68
Reuters reports:
Amazon.com Inc is pausing the construction of six new office buildings in Bellevue and Nashville to reevaluate the designs to suit hybrid work, the tech giant said on Friday... "The pandemic has significantly changed the way people work ... Our offices are long-term investments and we want to make sure that we design them in a way that meets our employees' needs in the future," said John Schoettler, vice president of Global Real Estate and Facilities at Amazon.
Separately, Bloomberg News reported on Friday that Facebook parent Meta Platforms and Amazon have pulled back on their office expansion plans in New York City.... "The past few years have brought new possibilities around the ways we connect and work," a Meta spokesperson told Reuters without confirming or denying the report.
Various news sites seems to have different pieces of the story. On Hawaii's most populous island Oahu, the office vacancy rate is now 14% — the highest level ever recorded.
And this week a tech founder admitted in Fast Company that after converting to a hybrid company, "we're just as productive as we were before the pandemic (if not more so). Our engineering team's engagement has remained strong, and we've actually seen a boost in retention since the transition to hybrid work....
"Our transition from in-person, to remote, and now to hybrid work has reinforced the value of staying open-minded to innovation not just in our products, but also in how we work."
Separately, Bloomberg News reported on Friday that Facebook parent Meta Platforms and Amazon have pulled back on their office expansion plans in New York City.... "The past few years have brought new possibilities around the ways we connect and work," a Meta spokesperson told Reuters without confirming or denying the report.
Various news sites seems to have different pieces of the story. On Hawaii's most populous island Oahu, the office vacancy rate is now 14% — the highest level ever recorded.
And this week a tech founder admitted in Fast Company that after converting to a hybrid company, "we're just as productive as we were before the pandemic (if not more so). Our engineering team's engagement has remained strong, and we've actually seen a boost in retention since the transition to hybrid work....
"Our transition from in-person, to remote, and now to hybrid work has reinforced the value of staying open-minded to innovation not just in our products, but also in how we work."
Other development opportunities (Score:2, Informative)
Instead of spending money on "infrastructure" in terms of building unsightly office buildings, they could pour money into the community.
A lot of what happened in the San Francisco Bay Area or Seatac area was that they forced out, through gentrification, and small businesses, ie food, entertainment, et al, and removed a lot of the culture that made the area great to live. Instead they created "walled gardens" where only a special MANGA badge would give you access to.
From the get go, MANGA businesses should
Re:Other development opportunities (Score:4, Insightful)
Re:Other development opportunities (Score:5, Funny)
I think it has something to do with a comic that's printed backwards.
Re:Other development opportunities (Score:5, Informative)
meta, apple, google, microsoft, amazon = MAGMA
Facebook, Apple, Amazon, Netflix, and Google = FAANG
https://www.wionews.com/techno... [wionews.com]
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I think MANGA has something to do with Trump and QueerAnon.
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But a lot of those businesses, your favorite low budget sushi place, your favorite cornbeef hash spot, your favorite crepe truck, they're all gone now because of the new wework space, or apple, or amazon, or whatever startup that took over that location.
Lack of space isn't exactly the reason these kinds of places disappeared. Lack of affordability is. Rather hard to run your favorite "low budget" cornbeef hash spot when the landlord is demanding $20K/month for that tiny shithole on the strip mall corner, and your workers need to make $30/hour to live somewhere above the local poverty line.
With hybrid and more liberal WFH, now that money can be spent in rural country to help w/ infrastructure (say broad band at farms, or even last miles to your home w/ underground wiring).
Any business, including local and state gov't, who cannot move w/ the current work trend is bound to lose employees, and lose them fast, quickly making their services highly untenable.
And when the employer is being given the gift of remote work employees who are paying the corporate real estate costs out of their own wallet, and somehow cannot figure
Re:Other development opportunities (Score:5, Informative)
I know Oahu specifically. The vacant office space is often difficult to repurpose. The properties that were reasonable to work with have actually been converted. Now you have 200,000+ square foot buildings isolated from anything meaningful in an office park nestled up in the jungle. Re-purposing into a more modern application is nearly impossible due to their cost structure. (I would love to set up a 100kSF "Maker/micro-business" facility, but you need $1/SF space not $5/SF.)
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I know Oahu specifically. The vacant office space is often difficult to repurpose....(I would love to set up a 100kSF "Maker/micro-business" facility, but you need $1/SF space not $5/SF.)
Your latter statement here, combined with an increasing vacancy rate, will eventually create those opportunities (every landlord will likely take $1/SF over zero income.)
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Yes, but nobody wants to be first; they all want to cling to the fantasy that the building is worth more than it really is, and if they decrease rents their peers will be angry with them. Since business success is all based on who is willing to jerk off whom, they are all stuck in a hell of their own making. Unfortunately, we are stuck in it too.
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That might be true in commercial real-estate but I can tell you from a decade of doing retail IT that it's got butkis to do with things in shopping centers, what other companies care about isn't even a whiff of a concern. They're focused on total profit for the portfolio and occupancy rates, you do whatever deals need to be done to keep the centers full even if you know that it's not going to be super advantageous at the end of the 10 year period because as long as you have the retailers coming to you for s
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My understanding of malls and shopping centers is basically what you've said, but I've also seen first-hand overpriced retail spaces sitting vacant for months or years with lease available signs in them. Many malls have also failed, as well, so I'm not sure what that says about the way they were managed.
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Yeah, we were outdoor power centers and strip malls, the indoor guys had it a lot rougher as far as effectively retenanting their space, but again I really doubt they spent a nanosecond worrying about what the mall across town thought about them lowering the $/sq ft on their space if they could get a deal done to keep an anchor and keep the space alive.
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Commercial real-estate leases don't work that way. The issue is financing; if they drop a lease rate then the banks assume all tenants will renew at the lowest rate, which can push a property into default. The best you get is renovation allowances and perks.
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"The pandemic has significantly changed the way people work ... Our offices are long-term investments and we want to make sure that we design them in a way that meets our employees' needs in the future," said John Schoettler, vice president of Global Real Estate and Facilities at Amazon.
Corporate doublespeak translator engaged! Translation results follow:
"The pandemic has significantly changed the way people work ... There's no way we're going to waste valuable office space on our drones when we can get them to supply the space at their own expense under the guise of WFH" said John Schoettler, vice president of Sweatshop Management at Amazon.
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Especially with Tech companies, they seem interested in the idea of not making a company, but a cult. Where Employees are mostly expected to dedicate their lives to the company, in turn the company provides them with their needs. This is attractive to new college grads, who are not really prepared for normal human living, with getting a mortgage, and loans, paying bills, etc... To them it is like College 2.0.
However this comes with a hidden cost.
1. Expected overtime work. 40 hours work week, will probabl
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Instead of spending money on "infrastructure" in terms of building unsightly office buildings, they could pour money into the community.
Or how about just pay your employees a fair salary.
Sayings (Score:2)
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Two years later? (Score:2, Funny)
Re:Two years later? (Score:4, Insightful)
It took the management teams two years to reach the decision?! Were they just out to lunch, or so dramatically out of touch that they couldn't see the workforce had transformed? They really need to take some lessons from the programming teams about iterating quickly.
Hypothesis 1 - their multi-year office leases are finally up for renewal.
Hypothesis 2 - their management teams are very good at not seeing what they don't want to see, it took them 2 years to finally see what's right in front of their face.
Hypothesis 3 - their middle management tried very hard to keep their useless jobs from being known to be useless, and have been feeding false info to the top bosses for the last 2 years, claiming their team needs to go back to office to work productively, until they finally cannot cover up the fact that everything has been running fine so far, and they cannot pretend the teams need to be in office anymore.
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It took the management teams two years to reach the decision?! Were they just out to lunch, or so dramatically out of touch that they couldn't see the workforce had transformed? They really need to take some lessons from the programming teams about iterating quickly.
Hypothesis 1 - their multi-year office leases are finally up for renewal.
Hypothesis 2 - their management teams are very good at not seeing what they don't want to see, it took them 2 years to finally see what's right in front of their face.
Hypothesis 3 - their middle management tried very hard to keep their useless jobs from being known to be useless, and have been feeding false info to the top bosses for the last 2 years, claiming their team needs to go back to office to work productively, until they finally cannot cover up the fact that everything has been running fine so far, and they cannot pretend the teams need to be in office anymore.
Hypothesis 4: Amazon, being a highly data driven and analytic organization, took a while to decide the data wasn't a fluke and the impact was real.
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Hypothesis 4 is not incompatible with hypothesis 3. It is at best hypothesis 3b; A subclass of hypothesis 3. Specifically, the useless middle managers insisted that there was insufficient data to consider liquidating them just yet, and the argument was "compelling" until it was clear the handwriting really was on the wall.
The real hypothesis 4:
C-level management is old, and does not like the idea of paying people to 'not come to work', or rather, 'dislike not being able to see the workers toiling away' at
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Hypothesis 6: they intensely dislike losing people to organizations with less strict office attendance.
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Hypothesis 7: They built prestige buildings with lots of what they thought would be job perks for their workers, now they realize that they can have the best job perk essentially for free.
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Hypothesis 7: They built prestige buildings with lots of what they thought would be job perks for their workers, now they realize that they can have the best job perk essentially for free.
A very likely hypothesis. Why pay for thinks like heat, ir condition, parking spaces, broadband, let alone snacks/sodas/parties when your employees will cover all those costs on their own dime? Plus, you no longer need to pay high cost of living area salaries since you can now hire people that will work for less. All the while having employees think remote work is a great perk.
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One has to wonder why companies don't realize that.
Well, maybe in another 2 years.
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One has to wonder why companies don't realize that.
Well, maybe in another 2 years.
You sure that's enough time for them to outwardly, confidently claim that it was their idea based on (reasons x, y, x, and a-b)?
I'm just thinking that NOW is showing they're following. A little later is showing they're an ass because now their people are getting what they could have had years ago but that money is gone now... But late enough that they can say that all of the dust has settled, it's not the thing people are talking about as a movable idea anymore... but they can belch something that is comp
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To nitpick, all of those are good points, except for broadband. Even as the workers end up paying for their own broadband, the business's broadband costs will go up, since there will be much more data passed thru the internet, where most of that is confined to the company's local network when working from the office
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To nitpick, all of those are good points, except for broadband. Even as the workers end up paying for their own broadband, the business's broadband costs will go up, since there will be much more data passed thru the internet, where most of that is confined to the company's local network when working from the office.
Possibly, although I'd bet many offices already were using cloud servers located elsewhere so the source of the traffic may shift from office to remote locations, but the data usage stay about the same; except for some locally hosted apps. Some may go down as instead of office ->Cloud->Office it's now Remote->Cloud->Remote, cutting out the office traffic. I'd guess the overall cost delta to be minimal compared to other savings. But your point is well taken.
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I'm trading my time for money, WFH gives me the ultimate perk, 20% of my time spent for my employer back as the commute time is eliminated. All the free coffee and subsidized lunches they could offer are but a pittance in comparison.
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No, it's much simpler. I hate humans and contact with them makes me nauseated, so not having to do so is a considerable job perk.
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Hypothesis 4 is not incompatible with hypothesis 3
Each of these hypothesis are free to completely contradict each other, because making multiple educated guesses does not mean you believe all of them to be accurate. Just that one or more of them are likely accurate.
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"It is at best hypothesis 3b; A subclass of hypothesis 3"
No, it is not a subclass, it is an orthogonal class. Do not pretend that you already have a perfect model of the effects of a unique economic shock.
Some examples of unknowns to try to model:
a) For employees who are in the office less than half the week but do not completely avoid the office, do you still assign them an individual space or have shared spaces at some occupancy ratio less than one space per employee?
b) Is the occupancy ratio different fo
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What's 'hybrid' at your company? What does coming in for x days per week throw in that working from home and communicating remotely not?
I'm not being a jerk, I so swear. I'm literally trying to understand what your company gives and gets, and what its motivation is.
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At the company I work for, hybrid appears to mean that the people who like to come to the office do that (turns out that lots of people aren't anti-social savants on the spectrum); some people, mostly in manufacturing, have jobs that require their physical presence; some people work exclusively from home; some people do a mixture of work from home and going to the office. I have a 10-minute commute and I actually like my co-workers, so I tend to show up at the office for half a day a few days a week.
I consi
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Thank you for explaining. That makes sense.
Yes, that is a very good system, and makes perfect sense. Given there's no manufacturing where I work, everyone can work from home. Note I say *can*. Owner refuses to let it happen. He likes to quote Elon Musk. One of those types, yes.
I pray the day comes for me and those I work with.
Thanks again for sharing. We aren't big enough to have both environments and even one charging station. Can barely afford to replace a power supply module in a critical server
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One of the major idiocies of our society is the loss of close associations in earlier living-work place relationships so much of the nation, so much of the nation spends huge time and vast energies commuting every morning and evening in frustrating stalled traffic on vast highways. The pandemic forced many to work from home which frustrated the egomaniac managerial sector that built their sense of command and domination. This is an opportunity to re-architect much of our living and working quarters and dispensing with the monstrous wast of time and energy that is now oppressing many lives and doing frightful damages to our planet.
No one is listening except for the people that are not decision-makers and face-name marks (xIOs, etc). Just us people that are completely getting what you're saying and seeing how it makes sense AND how it could even help the employers. But our words are irrelevant because for some sick or psychologically-explainable reason, our words only serve us and no one else. Wait, isn't that the other way around? Perhaps that's what the problem is. Stalemate?
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Hypothesis 3 - their middle management tried very hard to keep their useless jobs from being known to be useless
I have never quite understood this one, but perhaps it is because I don't work in more "business" focused roles like customer service or operations. Middle management in my IT roles spend the vast majority of their time trying to determine what their department / team / etc. should be doing and determining who should be assigned to do it. Not constantly monitoring employees. They may also do that, and it may even be what they spend most of their time doing, but it isn't the primary purpose of the role.
Remot
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People here hate middle management (and they hate CEOs and probably all management in general) and feel like they can do their jobs and support a leaderless company better than one that has leaders and direction.
It's easy to feel that other people's jobs have no use.
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Hypothesis 1b - the leases are up (early) because the owner got an offer to convert the property into residential.
No idea about the SV/SF area, but I could see this option working really well in London. It's bring "da kids" back into town, give the local eateries and small shops something to do and would make use of acres of unused offices space. Doubtless the big landowners will find some god awful way to f it up, but we can but hope.
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Its starting to happen, just slowly, and it isnt fast or cheap. It takes a lot to convert an office property into residential just because of the differing use case requirements. However leave a building alone long enough and it's bound to happen. We already had one or 2 office buildings in downtown denver proclaim they are working on converting to residential over the next year or two, so they are the first with their toes in the water since no other property management wants to be first
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Hypothesis 3 - their middle management tried very hard to keep their useless jobs from being known to be useless, and have been feeding false info to the top bosses for the last 2 years, claiming their team needs to go back to office to work productively, until they finally cannot cover up the fact that everything has been running fine so far, and they cannot pretend the teams need to be in office anymore.
That stabbed into my head with pain what happened to me (indirectly). It's not the same as the quote, but I'm adding on.
I was working from home while the owner of the company I work for was on vacation (yearly one) in FL for 6 or 7 months. Basically when it's cold or snowy up here, he wants to live in a 12x12 apartment in a tower in FL. I digress. He was gone My boss is a smart guy and also polite. He can tell you something you don't want to hear, but do it politely. The owner is just an.. insert ex
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Denial is a very strong emotion that can overrule almost all rational thought.
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Denial is a very strong emotion that can overrule almost all rational thought.
No it can't! I have so many points that can show how that's not true, and in fact contradictory! /humor
'They' are in denial (Score:5, Insightful)
One of the sillier features of the British newspaper 'The Daily Telegraph' over the past few months, along with at least one cabinet minister, has been their fixation on getting people back into the office. So one needs to ask 'why?'. Let's avoid the idea that this is rational behaviour - and focus instead on the consequences of a decline in office usage as people work hybridly. What happens? Office rents fall - so the value of commercial property falls, so our Lords and Mistresses who have vast investments in those buildings are going to lose a LOT of money.
This, of course, overflows into tech companies, because they tend to fill their boards with members of the financial establishment - it gives them credibility - so tech CEOs will be encouraged to resist working from home. Now, however, it appears that the spell has broken...
Two anecdotes:
A major UK union built a spanking new office building in the rising part of time to replace a rundown century old building. It was completed just before lockdown. Now all staff are being required to work 100% in the office; they reckon its to help avoid the union leadership being asked awkward questions about the new building.
A British local council is requiring its staff to come in 2 days a week to 'help support businesses in the downtown area'. Well - it's a nice theory; I'm sure a few members of staff will buy lunch / use the dry cleaners etc etc. But for the most part? Really?
The pandemic has demonstrated that traditional ways of working are not the only way. It will take time for the new ways to take hold, and a lot of feathers are going to be ruffled - or even totally removed in the interim...
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Yup, pretty much this.
But it's way, way worse than this. If we don't force our workforce back into offices, the real estate bubble will not just pop but blow up in our face. We'd have to realize that all the office buildings are essentially worse than worthless. Nobody needs all those offices that are nominally worth billions, and this would make these billions dissolve in a puff of smoke immediately.
Imagine what this would mean to pretty much any investment these companies have.
Re:'They' are in denial (Score:5, Insightful)
It's true a lot of "value" will be lost from those buildings. And goodness knows why anyone is going ahead building more of them (as they seem to be).
There is a possible future where the offices get rezoned as residential or mixed use. There is already a vast amount of spare office space, so there'd definitely be a huge "glut" of space available, but it could all be converted into residential. Initially the land owners will try and make little shoe-box apartments, but that's unlikely to work - bigger spaces with multi-use architecture and some of the great features of some offices (eg. floor to ceiling windows, loads of glass generally, lots of open-plan, lots of concrete for noise and heat insulation, good views of the city around you, etc etc. The ground floors can possibly be retail, the first floors could be workspace and gyms and such like. Basements can be parking, possibly for residents or contract.
I'm safely familied up in the suburbs, but I could completely imagine living in a quarter of a floor of an office building, with an open plan lounge/kitchen/planted area (because no outside space, and quite a lot of sunlight), one or two bedrooms and bathrooms off the side, concierge/reception downstairs and a lift (elevator) that doesn't stink of piss.
For my dream to come true though, yeah, the value of that office block needs to look a lot smaller than they think it is. The sudden "glut" of housing will largely solve the "housing crisis", but also wipe a good chunk off the value of my nice suburban bubble. It'll hurt a lot of people, but it's got to be a good thing in the long run.
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That isn't so easy.
Rezoning is harder than what it may look. First, there's usually a reason these places are "commercial". They're usually easý to reach and have a lot of traffic. Not exactly what you want from your home where peace and quiet sure trump having a lot of thoroughfare traffic. Commercial buildings may be subject to a different building code, not to mention vastly different floor planning. Very different plumbing (think one large bathroom instead of many small ones) and not enough rooms
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Many locations have a shortage of residential property, turning all those useless offices into residential units would significantly reduce the shortage.
There's no point having vast tracts of residential property empty during the day, and vast tracts of office property empty at night with thousands of people moving between the two areas twice a day. It's just grossly inefficient on so many levels.
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I absolutely agree, but your building codes may be vastly different for residental and commercial. Getting commercial buildings up to residental code may be more expensive than just letting them rot away.
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The pandemic has demonstrated that traditional ways of working are not the only way.
Which "traditional"? Looking back to antiquity the flip to cities is extremely recent.
What we have today was created in the early 1800s, with the industrial revolution forcing people into extremely dense factory systems. They had to be close to steam power and water power. Before then almost nobody lived in cities, people worked where the lived, often very near their or even in their fields or farms, or small towns. One common building design was a ground level shop with a second floor residence, if they
Good spot (Score:2)
Thank you for the reminder that offices are a largely Victorian invention - at least with large numbers of workers in them. As bureaucracy grew, paper had to be physically shifted around, making large scale offices the obvious choice. However with the end of the need to have hard copy to move around, that constraint no longer applies.
Translation (Score:5, Insightful)
Our offices are long-term investments and we want to make sure that we design them in a way that meets our employeesâ(TM) needs in the future.
Translation: we spent a lot of money on office space, and we are trying really hard to justify it, so we've been trying to force people back into said office space even through the clearly hate it.
There are often a number of reasons why we wouldn't proceed with a particular deal, including office utilization. The past few years have brought new possibilities around the ways we connect and work.
Translation: our employees have revolted, and are leaving us to find jobs with more forward-looking companies who have embraced remote work. We've decided to stop the senseless office expansions since we can't even justify the offices we already have. We need warehouses, not offices.
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this thread is funny, because lots of people have different opinions
https://it.slashdot.org/commen... [slashdot.org]
maybe there's nothing nefarious here, and we're all just trying to get along?
That sound you just heard (Score:2)
There's a reason why so much Wall Street money fled commercial REIT's and started buying up multi-family homes, and in many markets single family homes. They know the office isn't coming back the way it was before C19.
Residential (Score:2)
We have home prices and rent rates going through the roof, people can't find the housing they need. How about convert some of these projects to residential spaces?
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I too wonder if this could happen. But because it is hard [slashdot.org], and because the space is worth less. But I think you are right, that it is inevitable, and we need to figure out how to do it.
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It's already a thing in downtown Houston, where I used to work. Some of the older office highrise buildings have residential space now. This might spread as companies scale back their use o office space.
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We have home prices and rent rates going through the roof, people can't find the housing they need. How about convert some of these projects to residential spaces?
But if we do that, it will cost more to change the plan and convert, so the sale and property tax (I don't know how that factors in; it just does) values will be far higher than if we just keep sticking with the same plan we already have and don't put thought into it to steer to a more effective course.
Translation: they builders and designers and politicians want the same or more money coming in to them with a "solution" to a "problem".
Just slowing the internal buildout (Score:2)
The way this was described here on the Nashville local news was that Amazon was finishing their buildings however the buildout of cubes and office space was being put on how while they re-evaluate how they should do it.
Rather than the standard workstations, they are looking at focusing on using the space for larger, more comfortable working spaces with the intention of them being used when a team comes into the office for planning meetings, etc.
It think it's brilliant. And a nod that maybe they get it unli