Job cuts are sending a chill through the remote-work world

THE in-office perks did not lure them back. Those all-staff e-mails? The warnings were easy to ignore.

It is the layoffs – increasingly targeted at remote workers – that are changing the calculus on working from home. Since the pandemic, many professional workers have had leverage in the battle over office attendance, as the flexibility to skip commutes for more sleep or time with family took hold. But a cooling white-collar labour market is having a chilling effect as companies increasingly scale back work-from-home options. 

This polarising pivot is leading many remote staff to a harsh but hard-to-ignore conclusion: the only thing worse than having to go in-person for a job is not having one at all. 

Josh Schur got caught in the shift.

Last summer, the 37-year-old quit his job as an associate producer on a television show when management told him to be in five days a week. He figured he would be able to find a remote role quickly. It has now been six months. Layoffs are mounting, and he is realising that he may need to take a job at least partly in an office. “I don’t have a choice at this point,” he added.

Schur’s dilemma represents a new phase in the protracted battle over return-to-office. Call it the end of the end of the office. While the overall US job market is strong, perceptions that it is slowing, especially in the white-collar world, are empowering employers to call staff in. And, employees are concerned that they cannot push back.

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Fully remote staff were more likely to be cut last year than their colleagues who worked in office, according to Live Data Technologies, an employment data firm that analysed the status of two million white-collar workers. The share of fully remote US job postings on LinkedIn dropped more than nine percentage points between the beginning of 2022 and the end of last year. And across the Fortune 100, the average in-office attendance requirement is now 3.1 days, according to real estate firm JLL.

“The perception that it’s a lousy job market is persuading people that they better say ‘yes’ (to in-office work) because they don’t want to hunt for a job in a down market,” said Peter Cappelli, a professor of management and director of the Center for Human Resources at Wharton.

Employees at many companies, including banks on Wall Street, have long been back five days a week. Other firms, however, have fully embraced remote work or hybrid schedules. Executives have said that flexibility helps attract and retain staff, especially in smaller cities with a less-robust talent pipeline. 

And, remote options can be especially important for employees with young children.

Still, it is hard not to argue that the vibes are shifting some four years after Covid-19 shuttered offices. The new pressures persuaded 28-year-old Sebastian Lopez Barba, who works in social media marketing, to leave a remote role. The costs were high. Working at home in San Bernardino County meant money saved, no commute and extra time with family.

But Lopez Barba realised that to move up in his career, he would need to be seen. Plus, he is worried about the economy.

“I don’t have the luxury to say no,” said Lopez Barba, who will be moving to Long Beach, California, to be closer to his new office. “The market has never been worse.”

Despite the anxiety among some workers, the data shows that the share of US firms requiring full-time, in-office attendance actually declined from 49 per cent in the first quarter of 2023 to 35 per cent in the first quarter of this year, according to the Flex Index by Scoop, which advises organisations on how to coordinate hybrid staffing. Firms using structured hybrid models increased to 32 per cent from 20 per cent over the same time period.

Vijay Govindarajan, a professor of management at Dartmouth’s Tuck School of Business, envisions firms adopting more “structured hybrid models”, with staffers required to come in several days a week. 

The many forms telecommuting can take means that advocates and antagonists often end up arguing about different things. Evangelists often encourage some form of hybrid, not ditching the office entirely. Chief executive officers tend to argue in favour of collaboration and culture; only a loud few have made claims about telecommuters being lazy or “morally wrong”. Companies including Spotify and Yelp have retained remote-work programmes.

One group of employees Govindarajan sees with a particular incentive to work in-office are new hires who may not yet have solidified relationships with their new teams.

That is something 40-year-old Doug Heckman wants to accomplish when he starts a job at an artificial intelligence video company in New York City this spring. He spent the past six years working remotely. But he is burned out by video conferencing and looking forward to hybrid. “It’s going to help if I can get in front of people rather than just being that remote guy,” he said. “It has the potential to accelerate my career.”

Others have reached the point where they want to see colleagues more. Jen Holmes, 40, is planning a move to New Jersey this summer after three years in Austin. While it is not due to any looming return-to-office mandate – her employer, public-relations firm LaunchSquad, is fully flexible – she is looking forward to popping into the firm’s New York co-working space for client meetings, mentorship and staff lunches.

“I do miss the community,” she noted. “I miss saying hello to people and getting interrupted by someone who likes my lipstick that day.” BLOOMBERG