Work Remote Doesn’t Work

June 7, 2023

Jamie Dimon, JPMorgan Chase & Co’s CEO, along with David Soloman, Goldman Sachs Group Inc. CEO, made it clear in an interview conducted by CNBC in January, that working from home doesn’t work for younger staff or bosses.  Amongst the industrywide slowdown in finance and increasing signs of a recession, many industries are looking to implement return-to-office mandates (RTO).  RTOs could also be significant in future layoffs.  Dimon said there are jobs such as coding and researching where it is reasonable to work remotely, but a majority of jobs that can be done in office, should be done in office.

Currently, hybrid work models are the most popular approach for desk workers.  As of the week of January 11, office occupancy in New York City stood at 45.6% of the pre-pandemic baseline.  Meanwhile, Citigroup’s Jane Fraser has found that working from home can benefit engagement and productivity.  Fraser believes that Wall Street’s insistence on full-time office attendance is outdated, but if employee’s productivity dips, they can expect to spend more time in the office.  Additionally, James Gorman, Morgan Stanley’s CEO, stated that working five-days a week in office will not happen again.

Despite the vast differences in opinions from top CEOs, evidence has shown that work from home can have additional benefits on women.  Half of working mothers want to work remotely most or all of the time according to a survey of more than 10,000 white collar workers.  Dimon believes that companies should modify their work models to help those women who want to stay home to assist with the caregiving duties that disproportionately fall upon them.

Mass Layoffs

With all that being said, the flexibility that remote workers have enjoyed may be coming to an end.  A majority of employees are less effective at home, so when companies face financial trouble and need to cut costs, remote employees are the first to be laid off.  Prior to Elon Musk taking over Twitter, the company was losing almost $4 million daily.  After Musk required all employees to work fully in office or be fired, Twitter became profitable while other companies allowing remote work continued to lose money.  Earlier this year, Google fired 12,000 employees, which accounts for 6% of its global workforce. Goldman Sachs is expected to lay off another 250 employees, just five months after they laid off nearly 4,000 employees. A few weeks ago, Meta informed 6,000 employees that they had been let go.  This mass lay off follows the 4,000 employees let go by Meta in April and brings the total to 21,000 employees laid off by Meta since November 2022. The finance and technology sectors of the US economy are taking the largest hit in mass layoffs and the flexibility of work from home in these sectors could be at risk.  Additionally, Zoom’s recent layoff of 15% of its workforce is leading many to wonder if this signals the end of the remote work trend.