Atsuko Bolinguit, with tech startup company Fast, works in the office at her desk on March 24, 2021 in San Francisco, California.
Justin Sullivan | Getty Images
Starting Monday, Google is bringing most employees back to assigned physical offices three days a week. The company has said since the beginning of the pandemic that it eventually wants people to return.
A lot of workers don’t understand why, and they expressed their concerns at a recent all-hands meeting.
“Google made record profits through the pandemic,” CEO Sundar Pichai said, reading from a question submitted by an employee and upvoted by many others on Google’s internal board called Dory. “Why is the RTO policy not work from office when you want to or when it makes sense to?”
Google’s balancing act is shared by many employers, particularly as surging gas prices make long drives and traffic jams even more unappealing than they were two years ago. Tech companies in particular have outperformed during the pandemic, thanks in part to a wide array of cloud-based collaboration tools. Employees have gotten used to the flexibility and family time.
Companies now face a test to see how employees will react as some optional work situations become mandatory and the labor market continues to tighten. Megan Slabinski of consulting and staffing firm Robert Half said two-thirds of employers say they want workers back in a “near full-time capacity,” and half of employees say they’d look for a new job if that was required.
“It’s fascinating the level of disconnect between employers and employees,” said Slabinski, who oversees the Pacific Northwest, Colorado, Utah and Northern California as district president for Robert Half.
Some companies have already changed their policies several times leading up to their office return.
In June, Amazon walked back its original return plan, telling corporate workers it would allow them to come back to the office three days a week instead of full time. The company said it was “learning and evolving as we go.” In October, Amazon said the decision will be left to individual teams.
Microsoft and Google added 30-day “transition” periods to ease workers back into their new schedule.
Last spring, when Google first tried bringing employees back to the office before Covid-19 cases spiked again, the company said employees could apply to work remotely for up to 12 months but would be approved only in “the most exceptional circumstances.” They could also be get called back to an assigned office at any point.
Leadership has since lightened its tone. Google says it has approved 85% of requests for relocation or permanent remote work.
Sean Gallup | Getty Images News | Getty Images
“You’re grownups and we trust you to do what’s right for you, your families, and your life, while respecting the new baseline,” Prabhakar Raghavan, who oversees search, ads and commerce, wrote recently in a memo to employees. “We don’t expect 100% fidelity to the 3-2 hybrid work week 24×7.”
At the all-hands meeting, Pichai said “there’s a real desire for people to communicate and collaborate so we’re trying to balance all of that,” according to audio obtained by CNBC. “We’ll keep taking a close look at all of this,” he said.
One reason for the partial return, Pichai said, is for people to get to know their colleagues.
“We hired so many people over the last two years who just don’t have a sense of how the company works,” he said.
Even Twitter, which announced in 2020 that employees could work remotely “forever,” told staffers last month that “distributed working will be much, much harder.” CEO Parag Agrawal, who replaced Jack Dorsey late last year, said he had hoped to see people in the office because in-person work will “bring that culture to life in such a powerful way.”
Slabinski said some companies are waiting to see what their peers do before making any big decisions. Amazon, for example, hasn’t announced a new return date.
“I think there’s an element of someone has to go first to require people back,” Slabinski said. “Amazon backed away when they started seeing attrition and now Google is requiring people to be back on site and it’s like hoping the rest of the industry joins in and it won’t become reason for resignations.”
Another challenge for employers involves syncing up schedules. Apple designated Mondays, Tuesdays and Thursdays as in-office days. Other tech companies have kept their plans vague.
Colin Yasukochi, executive director of real estate firm CBRE, said he expects the San Francisco commercial real estate market to get more competitive in the second and third quarters, when there’s a better sense of demand.
“They’re all sort of moving cautiously because they don’t really want to lose key employees,” said Yasukochi, adding that some people end up not seeing the point of going in when they experience the emptiness of it the office.
“There’s nothing worse than ‘Oh I made this effort to come in and put on real pants today and I’m the only one in,’” Yasukochi said. He said his San Francisco CBRE office is at 20% to 30% capacity “on a good day.”
Retention and employee satisfaction are more critical than ever across the tech sector as record numbers of people in the U.S. are quitting their jobs and exploring new opportunities. Forcing people to commute is an added risk.
“They’re rolling the dice and it’s a gamble I’m not sure I’d want to make in this environment,” Slabinski said.
Smaller companies could have an upper hand for talent, she added.
“They could really differentiate their opportunities where maybe they can’t compete for comp but they could offer flexibility and trust,” said Slabinski.
Google is falling back on one of its best tricks: perks.
Before the company announced a new return date, David Radcliffe, Google’s real estate and workplace services vice president, wrote an email to Bay Area employees, announcing that on-campus amenities such as fitness centers, free meals, lounges, game rooms and massages were back open.
There are some signs that other things are coming back as well. Brandi Susewitz, founder and CEO of corporate furniture reseller Reseat, said her business more than doubled since December. Most of its clients are “cautiously optimistic” in their office planning. Reseat works with companies like Yelp, Uber and Oracle.
Susewitz said she’s getting some pretty interesting furniture requests. One thing people want is single-occupancy phone booths.
“Instead of having assigned seating, they’re doing renovations to make it open seating, a hoteling environment,” she said. They’re “designing spaces to feel more like living rooms.”
IMF hikes global growth forecast as inflation cools
The IMF has revised its global economic outlook upwards.
Norberto Duarte | Afp | Getty Images
The International Monetary Fund on Monday revised upward its global growth projections for the year, but warned that higher interest rates and Russia’s invasion of Ukraine would likely still weigh on activity.
In its latest economic update, the institution said the global economy will grow 2.9% this year — which represents a 0.2 percentage point improvement from its previous forecast in October. However, it said that number would still mean a fall from an expansion of 3.4% in 2022.
It also revised its projection for 2024 down to 3.1%.
“Growth will remain weak by historical standards, as the fight against inflation and Russia’s war in Ukraine weigh on activity,” Pierre-Olivier Gourinchas, director of the research department at the IMF, said in a blog post.
The Fund turned more positive on the global economy due to better-than-expected domestic factors in several countries, such as the United States.
“Economic growth proved surprisingly resilient in the third quarter of last year, with strong labor markets, robust household consumption and business investment, and better-than-expected adaptation to the energy crisis in Europe,” Gourinchas said, also noting that inflationary pressures have come down.
In addition, China announced the reopening of its economy after strict Covid-19 lockdowns, which is expected to contribute to higher global growth. A weaker U.S. dollar has also brightened the prospects for emerging countries that hold debt in foreign currency.
However, the picture isn’t totally positive. IMF Managing Director Kristalina Georgieva warned earlier this month that the economy was not as bad as some feared, “but less bad doesn’t quite yet mean good.”
“We have to be cautious,” she said during a CNBC-moderated panel at the World Economic Forum in Davos, Switzerland.
The IMF on Monday warned of several factors that could deteriorate the outlook in the coming months. These included the fact that China’s Covid reopening could stall; inflation could remain high; Russia’s invasion of Ukraine could shake energy and food costs even further; and markets could turn sour on worse-than-expected inflation prints.
IMF calculations say that about 84% of nations will face lower headline inflation this year compared to 2022, but they still forecast an annual average rate of 6.6% in 2023 and of 4.3% in 2024.
As such, the Washington, D.C.-based institution said one of the main policy priorities is that central banks keep addressing the surge in consumer prices.
“Clear central bank communication and appropriate reactions to shifts in the data will help keep inflation expectations anchored and lessen wage and price pressures,” the IMF said in its latest report.
“Central banks’ balance sheets will need to be unwound carefully, amid market liquidity risks,” it added.
Most Adani shares continue losses; founder loses $28 billion in month
Gautam Adani, chairperson of Indian conglomerate Adani Group, at the World Congress of Accountants in Mumbai on Nov. 19, 2022. Founder Gautam Adani, the richest man in Asia and once second only to Elon Musk, fell out of the world’s top five richest to rank seventh on the Bloomberg’s Billionaire Index.
Indranil Mukherjee | Afp | Getty Images
Shares of most of Adani Group companies continued to see sharp losses for a third consecutive trading session as the company attempted to rebut short seller firm Hindenburg’s report, which accused the conglomerate of stock manipulation and an “accounting fraud scheme.”
Adani Enterprises erased earlier gains of up to 10% and last traded flat in Mumbai’s afternoon trade after the group published a lengthy response of over 400 pages to Hindenburg’s report over the weekend, saying that it will exercise its rights to “pursue remedies” to protect its investors “before all appropriate authorities.”
Adani Enterprises’ stock price remains more than 25% lower in the month to date, Refinitiv data showed. It proceeded with a secondary share sale worth $2.5 billion, which were overshadowed by a rout that wiped out a total of $48 billion as of last week’s close.
His net worth fell $27.9 billion year to date, the index showed. It peaked at $150 billion on Sept. 20, 2022, before falling to to $92.7 billion as of last week’s close, according to the index.
Despite small gains seen in Adani Enterprises, other affiliates of the Adani Group continued to plunge.
Adani Group said Hindenburg’s allegations were a “calculated attack on India, independence, integrity and quality of Indian institutions, and growth story and ambition of India,” in the response it released over the weekend.
The group’s chief financial officer Jugeshinder Singh said in an interview with CNBC-TV18, an affiliate of CNBC, that the value of Adani Enterprises has not changed “simply because” of share price volatility, adding it instead lies in its “ability to incubate new businesses.”
He added that he is confident Adani Enterprises‘ follow-on public offering will be fully subscribed, calling Hindenburg’s report “simply a lie” and the timing of the report “malicious.”
Hindenburg on Monday morning described the group’s response “bloated” and claimed it “ignores every key allegation” against the conglomerate that it raised.
“Fraud cannot be obfuscated by nationalism of a bloated response that ignores every key allegation we raised,” the short seller titled its response to Adani Group.
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