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Commercial
San Francisco

Despite tech layoffs, employees stay away from the office

Costs to replace workforce would be “staggering,” commercial agents say

Remote worker and empty office
(Illustration by The Real Deal with Getty)

Tech workers in San Francisco still hold power in the ongoing negotiations over the return-to-office question, even after thousands were laid off in the last quarter of the year, according to commercial brokers.

“The C-suite and management are eager to get workers back in the office to facilitate collaboration, improve communication and enable mentorship, while the workers prefer to work remotely, with its various benefits,” said Transwestern Executive Managing Partner Mike McCarthy via email. “To date, generally speaking, management has been slow to declare a mandate requiring workers to come back to the office for fear that the current employment market conditions favor the employee. If employees leave to pursue other opportunities that do allow remote working, the costs associated with replacing them would be staggering.”

McCarthy said the dynamics between employers and employees are always changing and may shift in the new year, but as of yet tech workers still retain the advantage. That position was echoed by other commercial agents as well, who said that the layoffs from Twitter, Facebook and other big names in tech may be too new and too close to the holiday season to have moved the needle much one way or the other.

“Just because company XYZ laid off 5,000 employees last month, the ramifications of that don’t happen overnight,” said Avison Young Principal Ross Robinson. “But I think we’re going to find out a lot in the first quarter of next year.”

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For this year, a definite pattern seems to have set in, according to Avison Young data, with Tuesdays, Wednesdays and Thursdays the preferred in-office days. In mid-November, foot traffic rates in San Francisco offices on those days were hovering around 50 percent of what they were before the pandemic, according to AY, whereas Fridays see just 40 percent and Mondays have the lowest attendance at 35 percent.

The Tuesday-to-Thursday in-office schedule is the “prevailing model” at the moment, according to Jim Walker, senior vice president at Kidder Mathews. He said via email that tech makes up half of the SF office leasing market and has been “slow” to require workers’ presence in the office.

Tech may lead the way, but it is hardly alone. An October report from San Francisco Chief Economist Ted Egan showed that, in a nationwide study, employees’ desires to work from home an average of 2.75 days per week hadn’t changed much over the last year while employers’ willingness to accept those parameters has increased substantially. In January 2021, employers nationwide were planning on just over 1.5 days of remote work per week. By this fall, those expectations were up to 2.25 days a week.

“Thus far, employers have, on average, generally acquiesced to employees’ demand for greater workplace flexibility,” the report reads, pointing out that the trend is particularly pronounced in San Francisco, where office-based industries represent about three-quarters of the city’s GDP. “If expanded working-from-home does prove to be a permanent feature of work, it will impact virtually every aspect of San Francisco’s economy.”

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Commercial Real EstateOfficeRemote WorkSan FranciscoTechnology