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Layoffs And Economic Uncertainty Embolden Bosses To Call For A Return To The Office Grind

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In a memo to employees, Amazon AMZN CEO Andy Jassy ordered his workforce to return to the office at least three days a week. Jassy plans to implement this change effective May 1.

In the directive to his staff, the chief executive told his employees that it’s easier to strengthen the company culture and learn from one another when immersed in projects and activities with co-workers. He believes workers will be more engaged when in an office setting together.

The CEO contends that having people in close proximity to each other will offer serendipitous and impromptu interactions, brainstorming sessions, a more straightforward way of communicating with each other that tops video calls, a higher level of energy to feed off of and teachable moments between managers and staff. He concludes that Amazon’s in-office culture was critical to its success for the first 27 years. He intimated that it would only continue to be successful for the next 27 years, if the office experience is maintained.

Jassy now has the upper hand. Up until recently, the Great Resignation and war for talent raged. It was hard for employers to find and retain top talent. Tech companies needed to do whatever it took to recruit and hold onto them. After nearly 110,000 tech layoffs in 2023, and more than 160,000 people let go in 2022, professionals in this space are growing concerned. If employees push too hard to remain working remotely, there is a chance they could be next on the list for downsizing. The threat is real and frightening as thousands of highly experienced white-collar professionals have been laid off at marquee firms, such as Meta, Google, Zoom and Salesforce.

The news is a big blow for those who want to continue working remotely. To make matters worse, Amazon office workers may see a decline in total compensation. Like most tech companies, the online-retailing giant pays its people a salary and a sizable amount of restricted stock units. When the stock price soars, the employees could reap a windfall. However, when the stock price drops, which has happened, it could cause all-in total compensation pay for 2023 to fall between 15% and 50% lower than what Amazon predicted the target prices to be, the Wall Street Journal reported.

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The Big Bosses Are Asserting Their Power

The corporate mood has shifted from being empathetic and attentive to the needs of workers to Meta CEO Mark Zuckerburg warning employees that their work performance will be scrutinized more intently than in prior years. Sundar Pichai, Alphabet’s CEO, told his team they must conduct their work with more urgency, have greater focus and be hungry.

Bob Iger, the former and now once-again CEO of Disney, made one of his first orders of business to bring back workers to the office four days a week starting March 1. Iger mandated Disney employees to work in-office four days per week, saying, "In a creative business like ours, nothing can replace the ability to connect, observe and create with peers that comes from being physically together.”

Starbucks SBUX ’ interim CEO Howard Schultz was displeased that employees disregarded his return-to-office request and is now requiring office workers to return for three days a week. At Starbucks, Schultz asserted that the global coffee chain should remedy the unintended consequences of remote work. He contends that the company is losing the art of collaboration, doing work in silos prevents actual prioritization and his employees are losing their connection with a shared mission by not being together.

Elon Musk, upon acquiring Twitter, immediately put an end to former CEOs Jack Dorsey and Parag Agrawal’s pledges to allow workers at the social media platform to work remotely “forever.” Similarly, he requires employees of SpaceX and Tesla to come into the workplace. Skeptical of working from home, he tweeted last year, “All the Covid stay-at-home stuff has tricked people into thinking that you don’t actually need to work hard. Rude awakening inbound!

In an interview with Bloomberg at the World Economic Forum in Davos, Switzerland, Morgan Stanley MS CEO James Gorman didn’t mince words about his thoughts on the prevailing permissive work culture, stating that working remotely is “not an employee choice.” Gorman said, “They don’t get to choose their compensation. They don’t get to choose their promotion. They don't get to choose to stay home five days a week. I want them with other employees for at least three or four days.” However, despite promoting the return to office, Gorman acknowledged that it's not a one-size-fits-all declaration. Managers need to make decisions on the specific role and circumstances of the employee. “There are different kinds of jobs. Five days in the office for everybody is not going to happen again.”

JPMorgan CEO Jamie Dimon told an audience in Davos that remote work “doesn’t work” for bosses. Dimon said that younger employees are not benefiting from this work style. However, he did offer a caveat, stating that working from home may be helpful to some people. Dimon thinks business leaders should "modify your company to help women stay home a little," as working mothers disproportionately bear the brunt of childcare. The chief executive is also concerned that people who work remotely may be unfairly targeted for layoffs. On the topic of returning to the office, Dimon acknowledged, “People don’t like commuting, but so what?”

Goldman Sachs’ CEO David Solomon shares the same sentiment as Dimon. Solomon famously said early on during the pandemic that remote work is an “aberration.” Under his remit, a number of young bankers complained that they were forced to work 100 hours a week, which led to alleged sleep deprivation and lack of work-life balance. In response, he increased their compensation and allowed them to take off on Saturdays.

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