This may sound like a joke but having gleaming, globally distributed offices is absolutely is a matter of great pride and ego for the C-Suite. They absolutely fantasize about how they are jet setting from one office to another and how all the employees roll a red carpet for them.
We already know the C-suite is oligarchical in nature with wage suppression in Silicon Valley, so we know they meet and communication. And things like corporate real estate is garden variety MBA stuff that these guys can freely talk about at the get-togethers.
Not having employees in buildings means those buildings aren't really worth anything. A collapse in the value of office space is something none of these companies want. It would impact share price, options, and executive pay, because these things are 30-50 year investments at a minimum.
Do you know what looks REALLY bad? A giant fancy office with five people in it.
Better force people to fill it up. We are stuck, we spent the money, can’t have it look bad.
Workers certainly don’t.
Everybody wins: extras get to not be homeless and pay their bills, companies look busier than ever, extras can act whatever fantasy management wants to show off, offices have some kind of purpose again, we get to work wherever we like and do actual work… What’s not to like?
Plus, while the overall employment situation is strong, the tech downsizing wave may not be over and if you can get people to self-select out, you can maybe avoid having to officially have layoffs.
Are you sure announcing layoffs hurts share prices? I mean, companies only recently were doing it while still being highly profitable.
I'm relatively sure losing people without severance and without WARN Act and similar notice issues, is easier on the financials for the same number of positions cut than the alternative.
I didn’t say they did.
I said that if you can get people to leave voluntarily, that’s better for the financials.
That doesn’t mean that there aren’t conditions where the best available option (from a serving the shareholders perspective) is layoffs. Just that, ceteris paribus, its better to shed the headcount without the added costs imposed by layoffs; the benefit (when there is a benefit) of layoffs is reducing the headcount, not bearing the severance, WARN Act compliance, and other costs particular to layoffs.
My guess is that CEOs and VCs have some obscure reason to force people back into the office. Perhaps related to real estate, especially considering how hard to sell it is and how much higher the interest rates are. Middle management will typically eat up whatever narrative C-level feeds them.