The coronavirus pandemic has caused the world to remain cooped up at home with countries following strict lockdowns. People have started working from home, a possibility that has never been considered before. Amidst all the chaos due to COVID-19, significant companies across the globe have realized working from home could be the new normal, even post the pandemic.
Mondelez, Nationwide, Morgan Stanley, and Barclays talk about the possibility of working from home permanently to reduce office space and cut costs. After non-essential positions and businesses were required to work from home, corporations have seen proof that productivity does not suffer and are now considering employees not to return to their offices. This would also help firms to battle the prolonged global economic slump that they will be facing.
Nationwide Announces Permanent Transition to Hybrid Work Model
The insurance company, Nationwide, announced during the week that it would permanently transition to a hybrid work model. They would continue to operate in four main corporate offices only while majority offices continue working remotely. Nationwide will be exiting all the other locations by Nov. 1, 2020.
Nationwide CEO Kirt Walker said in a statement.
“We’ve been investing in our technological capabilities for years, and those investments paid off when we needed to transition quickly to a 98% work-from-home model. Our associates and our technology team have proven to us that we can serve our members and partners with extraordinary care with a large portion of our team working from home.”
Food Giant Mondelez is Making Adjustments!
Mondelez CEO, Dirk Van De Put said the company is making some adjustments that will make it easier for them in a recession, including the work from home situation.
The Mondelez CEO said, “Maybe we don’t need all the offices that we currently have around the world. So there is a major effort going, taking place as it relates to the costs in the business.”
Morgan Stanley Working Towards Employees Working From Home Every Month
Morgan Stanley CEO James Gorman believes they have proven that it is possible to operate without a footprint, and the bank would be needing fewer real estate after the pandemic. About 90% of the employees are working from home during the pandemic.
In a recent Bloomberg interview, he mentions,
“Can I see a future where part of every week, certainly part of every month, a lot of our employees will be at home? Absolutely!”
Barclays Considers Long-Term Adjustment on Location Strategy
Barclays CEO Jes Staley said this week that they would not be putting thousands of workers in a corporate office building ever again.
CEO, Stanley said, “There will be a long-term adjustment in how we think about our location strategy, the notion of putting 7,000 people in a building may be a thing of the past.”
Impact on Commercial Real Estate
When businesses consider letting go of offices, this will have a significant negative impact on the commercial real estate industry. Apart from future corporate reduction, retail and restaurant businesses may also have to vacate their commercial leases unwillingly. Various companies, including We, Work, and retailers such as Gap, have stopped paying some rents due to the lack of revenues for the past few months.
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