A huge factor is occupancy rates, which directly affect commercial real estate values which in turn affect interest rates on the loans for a given property. Commercial real estate loans are reevaluated every ten years and a low occupancy rate results in higher interest rates because the property is determined to be lower value. For example, Amazon is pushing RTO so hard because the South Lake Union properties are coming up on their ten year mark. Even a tiny increase in interest rate would result in (IIRC) billions in interest payments over the next ten years. Corporations are willing to risk the unknown labor/skills carnage than face the known interest payments carnage.
The other factors are getting people to quit so that unemployment/severance don’t need to be paid and managers with control issues. It’s all contemptible, but that’s what’s going on there.
As an aside, I work in software. Even in compliance-intensive environments (think: auditing, national security), some forward-looking multinational corps are going remote-only. And the really nimble players are remote-first. They get their pick of top talent at lower pay rates. I gladly take ~50% less to work from wherever I want on a flexible schedule without ever sitting in traffic. I think we’re going to see a shakeup in the top ten companies because new entrants are going to get superlative talent.
A huge factor is occupancy rates, which directly affect commercial real estate values which in turn affect interest rates on the loans for a given property. Commercial real estate loans are reevaluated every ten years and a low occupancy rate results in higher interest rates because the property is determined to be lower value. For example, Amazon is pushing RTO so hard because the South Lake Union properties are coming up on their ten year mark. Even a tiny increase in interest rate would result in (IIRC) billions in interest payments over the next ten years. Corporations are willing to risk the unknown labor/skills carnage than face the known interest payments carnage.
The other factors are getting people to quit so that unemployment/severance don’t need to be paid and managers with control issues. It’s all contemptible, but that’s what’s going on there.
As an aside, I work in software. Even in compliance-intensive environments (think: auditing, national security), some forward-looking multinational corps are going remote-only. And the really nimble players are remote-first. They get their pick of top talent at lower pay rates. I gladly take ~50% less to work from wherever I want on a flexible schedule without ever sitting in traffic. I think we’re going to see a shakeup in the top ten companies because new entrants are going to get superlative talent.