Tech companies have traditionally been at the forefront of revolutionizing
office space. Apple Park is designed to be seamless with nature.
It's open, transparent.
It brings the outside in.
Open floor plans have become the norm in many industries after tech
companies touted the advantage of this arrangement for collaboration and
innovation. And perks like in-office gyms, childcare centers and communal
cafeterias have also gained traction, as companies compete to attract top
talent. But coronavirus may make this type of work environment a thing of
the past, at least for the near future, as companies try to balance
communal work with safety.
In an investigation recently published by South Korea's Centers for Disease
Control, out of the 216 people who worked on the floor of a call center,
94 people tested positive for the virus.
And employees are understandably concerned.
A recent survey of over 2,000 full-time employees showed that over half
believe their work site will need to be restructured to create more
personal space.
While 49 percent believe that open offices and workspaces are no longer
conducive to their health and wellness.
It's never a good idea to force your employees under fear of losing their
jobs to come to work.
So employers will have to give employees some kind of flexibility.
Tech companies, like everyone else, will need to adapt before they can
bring their workforce back into the office.
When it comes to reopening offices, it seems that everyone from Google, to
Twitter to Facebook is taking a measured approach.
We've made the decision that we're going to be on the slow end of having
people come back to work. We've already started opening up some of the
offices for certain roles that really can only be done there.
But, we'll open up a little more slowly over time than might otherwise be
possible, just in order to make sure that the folks who really need to be
able to stay open, kind of have right of way on that.
Facebook is asking employees who can do their jobs remotely to do so
through the end of the year and cancelling all company gatherings of over
50 people through June 2021.
I think we're going to be the most forward leaning company on remote work,
at our scale, for sure.
And the plan that we have initially involves a couple of big steps.
The first is aggressively opening up remote hiring.
And we are going to couple that with a more measured approach to opening
permanent remote work for existing employees.
Zuckerberg predicts that 50 percent of the company's employees could be
working remotely within the next five to 10 years.
An internal company survey also found that of those interested in
full-time remote work, 75 percent expressed some interest in moving to a
different city. But Zuckerberg warned that if employees wanted to move to
a different location, they may face pay cuts that would reflect the lower
costs of living in those areas.
Google told its employees that it will slowly reopen its offices starting
July 6th, beginning with 10 percent building occupancy and eventually
building up to 30 percent occupancy by September.
Though Google didn't offer specifics, Pichai said in an email to employees
that offices would have rigorous health and safety measures in place to
ensure social distancing and sanitization procedures are followed.
For most employees, going back into the office will remain voluntary until
the end of the year. In the meantime, Google is covering up to $1,000 for
employees' home equipment and office furniture.
But the company has warned employees that it will not pay for perks like
lunch for those working from home.
Although Amazon's warehouse employees have worked throughout the pandemic
to keep deliveries coming for customers stuck in lockdown, Amazon's
corporate workers have been working from home since early March.
The company has said that any of its corporate workers can continue to
work from home until October 2nd.
For employees that wish to return to the office, Amazon said it would put
in place safety measures including physical distancing, deep cleaning,
temperature checks and the availability of face coverings and hand
sanitizer. Apple reportedly started to bring some workers back to its 2.8
million square-foot campus in May, including some hardware and software
engineers. Some employees are working from the Apple campus only a few
days a week as the building gradually reopens.
When workers arrive, they will have the option of taking a Covid-19 test,
but temperature checks are required.
Apple has also closed many break rooms and kitchens, is limiting the
number of people in elevators and asking employees to wear masks.
The company has also been opening some of its retail stores across the
country with requirements for customers to pass temperature checks and
wear masks before they enter.
In the most drastic case, Twitter told its employees that they can work
from home forever. The company is also offering to pay for home office
expenses. Though Twitter was embracing remote work even prior to the Covid
outbreak. We are a global service that requires global perspective.
For us to continue to thrive and be valuable to people around the world,
we need people from around the world to work with us.
Our concentration in San Francisco is not serving us any longer, and we
will strive to be a far more distributed workforce, which we will use to
improve our execution.
The trend of people leaving the pricey tech hubs of New York and San
Francisco was already in motion even before the coronavirus outbreak.
And with remote work becoming mainstream, it will likely accelerate.
The sort of workplace is becoming more highly skilled.
And that means that your typical worker is turning more into a knowledge
worker. And where and when they do their work is less of a concern than it
ever has been. Having a significant workforce that can work remotely
anywhere in the country, or even from another country, has some serious
implications, especially when it comes to taxes.
Many states have rules that say, here's what it means to be doing business
in our state. And if you do any of these things, we have the jurisdiction
to subject you to a business income tax.
One of those rules is called threshold nexus.
Threshold nexus can be established in a number of ways.
For example, states can tax a company if it exceeds a certain amount in
sales to in-state customers, or if it has a significant amount of property
or payroll in the state.
Generally, a single employee is all that is needed to open a company up to
paying taxes in a state, though in some circumstances a physical presence
is not even required.
So when you think about the remote employees right now, the big issue that
you have is, on the company side, they're going to be paying tax, in
corporate income tax, in more states than they ever have before.
In states that they maybe never even contemplated doing so.
Amid Covid-19, s ome states, including Mississippi, Massachusetts and New
Jersey, are suspending these nexus rules.
But it's not known how long the suspension will last.
Plus, with the drain on social resources, states may be more motivated than
ever to tax businesses.
I think that the states, if you collectively look at it, have said that the
Covid- 19 crisis is going to put them in a $500 billion deficit.
They've got to find some way to recoup that.
And this might be one way that they do it.
And then there are taxes the employee has to pay, which also vary widely
from state to state.
From an employee side, y ou're going to have withholding that, that
withholding tax can double up and maybe triple up.
And depending upon the state rules, you might not be able to get that
money back at the end of the year.
Remote work is nothing new, but the U.S.
has never experienced dealing with remote workers at such scale.
Kirkell thinks that now is a good time for the federal government to step
in and establish a unilateral set of nexus rules, at least for the
duration of the crisis.
If we could get that out of the federal government, it would do a lot to
alleviate the burden on businesses, and I think ultimately it would do a
lot to alleviate the uncertainties that we have.
And then there's the question of how companies' investments, like new
software for employees, will be taxed.
You could get credits and incentives for the investments.
It's another item that could potentially give you nexus in a state.
And from a sales tax perspective, you have the question of what's the
taxability and and what state gets the tax?
All of these employees working from home begs the question, what will
happen to tech companies' massive campuses?
Over the past few years, they've made headlines with increasingly showy
real estate acquisitions.
Though there haven't been plans to completely close down offices, there
are clues that expansion may slow.
In late May, Facebook said it's reducing the office space of its 50-plus
acre developmental proposal in Menlo Park from 1.75 million square feet to
1.25 million square feet. This will translate to about 2,550 fewer
employees in the building.
There's a big challenge right now, which is that a lot of opportunities are
only available in cities in these metropolitan areas, which means that
people kind of need to choose between the lifestyle that they want and
sometimes would need to move to a city and leave that in order to have
good economic opportunities.
But it's not clear why that should have to be the case.
And I think something like remote work can help on that.
Still, Zuckerberg acknowledges that recreating tech culture remotely will
be difficult. In general, I think one of the big challenges with with
remote work that we're all going have to work through is the feeling of
kind of building social bonds, building culture and creativity together.
When asked whether or not Google will continue with plans to build out its
new campus in Mountain View, CEO Sundar Pichai told Wired that he expects
that the company's existing footprint will not be an issue and that there
is a lot of growth planned ahead.
Apple, which unveiled its meticulously designed "spaceship" campus just
three years ago, has many open floor plan work areas, which the company
may need to redesign before bringing back its entire workforce.
When these tech campuses do open back up, employees will likely find them
looking very different from the way they remember.
Commercial real estate firm, Cushman and Wakefield, has shifted its
business model to guide clients through this unprecedented time.
The firm says it has helped 10,000 businesses and almost one million
people in China transition back to the office.
Based on that experience and data from the World Health Organization,
Cushman and Wakefield constructed a mockup of, what it calls, the "Six
Feet Office," in Amsterdam to demonstrate what a safe office space may
look like. The six-foot rule in terms of social distancing is really all
we have at the moment for protection.
So with that in mind and understanding that people won't have time to
reconstruct their office, they are not going to have that ability.
So most of what we are recommending in our playbook is, you're able to do
at zero cost. Some practices the company recommends include installing
Plexiglas partitions between workspaces and putting a piece of paper over
desks that can be discarded every day, as well as only walking in one
direction in hallways and not using your hands to touch elevator buttons.
Organizations are in a cash preservation mode, so the want to sort of
deliver a lot of capital into reimagining the workplace is not something
that they're doing. They want to try to figure out how do we make do with
what we have? De-densify and make sure that people are following whatever
the de-densification standards that we're putting in place.
Cushman and Wakefield suggested companies institute staggered start times
and limit the number of people in elevators and conference rooms.
The company also believes some people will continue to work from home, but
not the majority and not always.
Tech companies are going to continue to grow and tech companies are going
to continue to want the collaborative effort of their employees done, by
and large, in person, even as efficient as we've become from home.
To build a collaborative environment, to build a brand, to build loyalty,
to build trust and to create innovative breakthroughs, that's going to be
done with a collective group.
And that's going to be done in the office for the most part.
And then there are the high-tech solutions.
Brooklyn-based StrongArm Tech created a wearable device initially intended
to help warehouse workers avoid injuries.
But the company has now reconfigured the gadget to keep workers safe amid
Covid. The Fuse is able to encourage social distancing using its sensors
that communicate with each other.
As two users approach each other, we have haptic feedback that's delivered
as they start to encroach on that six-foot parameter that was indicated by
the CDC as the proper social distancing guidelines.
This system is also capable of contact tracing.
With contract tracing, we're able to discreetly understand every single
person that that individual of question had come in contact with.
And we do that because we were built in a time-series database.
So we're able to get forensic and understand down to the millisecond all
of the interactions of that individual.
And that's helping us build better protocols moving forward and better
reopening strategies for clients as we get more data into that system.
Estimote is another company advertising the use of its wearable beacons as
a safeguard against the spread of coronavirus.
Like StrongArm's tech, Estimote's beacons also vibrate if employees get
too close to one another and keep track of interactions.
The company has previously worked with the likes of Amazon, Apple and Nike
to help them track the movements of their products and people.
Density also makes a device that counts how many people pass through a
hallway or congregate in a conference room.
A new version of the gadget will send alerts to staff if a particular area
becomes too crowded.
Even Microsoft has partnered with UnitedHealth Group to make a coronavirus
screening app. Both companies are already using the app, which is
basically a daily symptom screener, with their employees and have opened
it up to others for free.
Other solutions being discussed are installing temperature checks at
office entryways, which are already commonplace in China, and using
ultraviolet light to disinfect high-traffic areas.
Amazon is already using thermal cameras to take the temperature of its
warehouse employees.
In a clip shared with "60 Minutes," the company also showed a prototype
UV-light robot, which could be used to disinfect Amazon's warehouses and
Whole Foods stores.
In the end, what the future of the tech office looks like, maybe up to the
employees as much as it's up to the companies.
Corporations probably are going to find themselves in roughly three
categories. People who literally cannot go to work because they have kids
and so forth and so on. People who don't want to go to work, or they are
worried about exposure because they have co-morbidities and so forth, and
people who are just dying to go to work, right?
They just can't wait to get out of the house.
So my guess is that you're going to see pods of people which will organize
themselves, that this group will be over in this remote place.
This group will be in the central office.
These people will never come into either because they have legitimate
fears until this thing gets resolved, which is a long time, and that these
little teams will organize in virtual pods and they'll work it out.
So employers will have to give employees some kind of flexibility.