The move the relocation is a major change to an office-centric culture. But there’s a catch: Salaries are likely to change to match local living costs.
Facebook said on Thursday that it would allow many employees to work from home permanently. But there’s a catch: They can’t keep their large Silicon Valley salaries in more affordable parts of the country.
Facebook’s Mark Zuckerberg told workers during a staff meeting that was streamed live on his Facebook page that within a decade, half of the company would employ more than 48,000 employees from home.
“It’s clear that COVID-19 has changed a lot over our lives, and that certainly encompasses the way most of us work,” Mr. Zuckerberg said. “From this period, I expect that remote work will also be a growing trend.”
Facebook’s decision, the first among tech’s largest companies, is a stark change for a corporate culture built to get workers into gigantic offices and keep them there. With the help of free shuttle buses, free cafeterias, and personal services such as dry cleaning, tech companies have done so much over the years to give employees little reason to go home, let alone avoid the office.
As other giant companies follow suit, tech jobs could start shifting from expensive hubs like Silicon Valley, Seattle, and New York. The option to work from home could also provide more reason for tech workers who claim that their overpaid salaries are still not enough to buy a home in San Francisco or San Jose to subsequently move into other parts of the country.
Mr. Zuckerberg’s announcement followed similar decisions on Twitter and the payment company Square, both run by Jack Dorsey. Mr. Dorsey said last week that employees at his companies may work from home indefinitely. At Google, employees have been told they can work from home by the end of the year, but the company has made no indications about permanent plans.
There are signs that remote work is popular among technologies. Following Mr. Dorsey’s announcement, Google searched for “Twitter jobs,” according to Google Trends.
Aaron Levie, the chief executive of boxing technology company Box, wrote on Twitter that “the push that occurs on remote work is changing the game for the future of tech as the iPhone launches” more than a decade ago.
Tech executives have long believed that face-to-face communication was a big part of the creativity that went into generating popular products. They built giant campuses that reflect that belief, from the quaint offices of Apple, Google, and Facebook in Silicon Valley to the new Amazon headquarters in Seattle.
Still, the biggest tech companies were trying to expand beyond their headquarters for the pandemic, as an older generation of companies like Intel had done. For example, Amazon is aiming not to open its second headquarters in Virginia. The coronavirus pandemic could accelerate those plans.
“Before the virus happened, a lot of the tech industry discussion was about how to bring people into workplaces and create affordable housing,” said Robert Silverman, a professor of urban and regional planning at State University of New York at Buffalo. “This is kind of a natural progression.”
An employee exodus from the largest urban tech hubs, combined with layoffs, could have dramatic local impact. Housing costs in the Bay Area, for example, have been falling since the pandemic began, according to rental company Zumper. Interest rates in San Francisco fell 7 percent in April, and were down 15 percent in Menlo Park, home of Facebook.
Mr. Zuckerberg has long ensured that employees working remotely will lose productivity. Facebook once again provided bonuses to employees who live within 10 miles of their headquarters. In 2018, Facebook expanded its main campus with elaborate new offices designed by star architect Frank Gehrydaktuin, including a 3.6 acre with over 200 trees.
Just last year, Facebook began moving to a 43-story office tower it had rented in San Francisco, and the company is still reportedly in talks for a major office expansion in New York, too.
In March, the coronavirus lockout forced companies to send employees home. Many tech companies, including Facebook, empty their offices before having local orders in place.
Now, more than two months later, executives are discovering that their remote workers performed better than expected. Mr. Zuckerberg said employees remain focused even though they work from home.
Facebook will start by allowing new hires who are senior engineers remotely, and then allow current employees to work from home if they have positive reviews about performance.
In early January, Facebook’s employee allowance will be adjusted based on the cost of living in the locations where workers choose to live. Facebook will make sure employees are honest about their location by checking where they log in to internal systems, he said.
Mr. Zuckerberg said the shift could offer more benefits than an inconvenience to the company. Allowing remote work will allow Facebook to broaden its recruitment, retain valuable employees, reduce the climate impact caused by commuting and expand the range of its operations, Mr. Zuckerberg said.
So far, Facebook, Square, and Twitter are far more aggressive than their counterparts in the industry. Their work is usually done in software code, which can be handled remotely.
At Apple, on the other hand, many employees are hardware engineers who need to be in the lab of the company, in particular, because of the company’s secrecy surrounding its products. Tim Cook, Apple’s chief executive officer, said in April that the company’s headquarters in Silicon Valley would be closed until at least June and hasn’t updated this timeline.
Start-ups could also find it difficult to manage a remote employee. Allowing workers to live in the Midwest could sustain the cost, but Silicon Valley has a gigantic talent pool from which start-ups attract their workers. Also, many venture capitalists, mostly based in Silicon Valley and San Francisco, expect the companies in which they invest in the neighborhood to be based.
Los Angeles-based Snap, the maker of Snapchat, allows employees to work at home through September. Evan Spiegel, chief executive of Snap, said in an interview that he regularly reviews the situation and considered guidance from health authorities about when he should be reopened.
“People want certainty, and there is a great deal of pressure as a leader to make definitive statements,” Mr. Spiegel said on Wednesday. “I think it’s important that we stay flexible in a rapidly changing situation.”
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