Pedestrian |
May 8, 2021 7:40 PM |
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Originally Posted by TWAK
(Post 9273718)
There has got to be cost savings from not having employees coming into work, with an extreme example of one of these placing going fully online. Maybe in terms of insurance or utilities, with the main one being building leases. On the other end I think it can contribute to employee savings with transportation, but the people with kids have a different situation.
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The office vacancy rate in San Francisco is the highest I can recall ever (40 years) because of companies trying to sublease what they now consider unneeded office space due to employees working at home. Whether they can actually sublease it successfully is another matter but they are trying and will save money if it works out for them.
But here's the other part of it some may not be expecting:
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The Work-From-Home Boom Is Here to Stay. Get Ready for Pay Cuts
By Noah Buhayar December 17, 2020, 2:00 AM PST Updated on December 18, 2020, 12:55 PM PST
. . . Like many people during the pandemic who could suddenly work remotely, M______ had moved without figuring out all the details with her employer. One thing they hadn’t discussed was salary. Now that she lived in an inexpensive city, [Compnay X] asked, would she be willing to accept a pay cut?
It’s a question that’s been foisted on many white-collar employees. In February only 8% of the U.S. workforce did their job entirely from home, according to research from the Federal Reserve Bank of Dallas. It spiked to 35% in May, as offices stayed closed and workers fled to less densely populated areas. The work-from-home rate has fallen a bit since and will drop further as vaccines are distributed. But a substantial number of workers are likely never going back to their old offices.
This shift has been especially pronounced in the tech industry, which has a high concentration of employees who can work from anywhere but are based (for now) in expensive coastal cities. Facebook, Microsoft, and Stripe have announced that more employees will be able to work remotely indefinitely. Like [Company X], those companies are also adjusting pay for workers who relocate. M_____’s salary and bonus will go down about 20% next year if she stays in Rochester. She’s resigned to the trade-off, at least for now. “So much in the world is not how I thought it would be,” she says . . . .
If the exodus to second cities and exurbs becomes permanent, it has the potential to improve corporate balance sheets, remake labor markets, and profoundly reshape the American landscape . . . .
Extremely expensive areas (the San Francisco and San Jose metro areas) would continue to command the highest salaries and equity awards. Recruiting and retaining people in two of the most costly housing markets in the country would be impossible without paying top dollar. Expensive areas such as Boston, Los Angeles, New York, Portland, and Washington, D.C., as well as their suburbs, would hew to the same levels [company X] had been paying employees in Seattle.
After that, there was a big group of mid-tier areas. Anyone who moved from an expensive place to one of these would get a 10% to 15% reduction in cash compensation (salary, plus bonus), as well as 10% to 20% less in stock. These included Austin, Baltimore, Chicago, Denver, Houston, Miami, and Philadelphia, as well as Frisco, Texas, just outside Dallas, where Redfin has an office. The company also threw in a few cities in the Pacific Northwest, including Olympia and Bellingham in Washington, and Bend, Oregon.
Everything that didn’t get called out—which included vacation spots such as Aspen, Colo., Rust Belt towns like Detroit and Rochester, and some major metro areas like Atlanta—ended up in a vast (and vaguely insulting) bucket called “Rest of the U.S.” Employees who moved to these places would expect a 20% reduction in cash compensation and a 25% cut to equity awards, even though a few of these locales were bound to have higher costs than Seattle.
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https://www.bloomberg.com/news/featu...-of-big-cities
So yeah, the company will save money multiple ways and you may well be making less. For real city-lovers, it could be a double whammy: Losing the fun of big city life (which has admittedly been nowhere to be found during COVID but will be back) and making less money (albeit probably needing less).
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