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Work-From-Home Isn’t Working for Amazon

September 2024 might go down in history as the moment the remote worker war ended. And not in the “home” team’s favor.

Just two days ago, we learned that the world’s second-largest private employer, Amazon, will require employees to be in the office five days a week. And while you can roll your eyes about how “last decade” that sounds…

We’re starting to see that the 2020 shutdowns weren’t the long-lasting workplace game-changer we thought they were.

That’s definitely Amazon CEO Andy Jassy’s opinion. He made that crystal clear this past Monday, telling his white-collar staff across the board that:

Before the pandemic, it was not a given that folks could work remotely two days a week. And that will also be true moving forward – our expectation is that people will be in the office outside of extenuating circumstances.

You see, he wants the company:

… to operate like the world’s largest startup. That means having a passion for constantly inventing for customers, strong urgency (for most big opportunities, it’s a race!), high ownership, fast decision-making, scrappiness and frugality, deeply connected collaboration (you need to be joined at the hip with your teammates when inventing and solving hard problems), and a shared commitment to each other.

Many Amazon staff members were taken aback by the declaration. Understandably so.

After all, like most other office workers around the world, they suddenly found themselves working from home in March 2020 – a situation that lasted nearly three years. So, when Amazon told everyone in February 2023 that they had to come in three days a week, that seemed like that.

A compromise had been reached, and the battle between executives and employees was settled.

Obviously though, there’s been a reconsideration since then. And I don’t think it will be the last one in corporate America.

Not by far.

The Detriments of Working From Home

How far we’ve come and how much we’ve seen in the last five years.

Early on in the shutdowns, none other than Amazon Chief Technology Officer Werner Vogels declared that “most organizations are going to be transforming into a completely cloud-based environment” from 2020 onward. Vogels might have been “talking his own book.” Amazon is, after all, the market leader in cloud hosting. But it wasn’t so far-fetched.

No one was going into the office… or to the gym… or to places of entertainment… or to congregate at all outside of socially distanced spaces at Home Depot and the grocery store. As a result, we heard on repeat that office culture was dead.

I have to admit that I didn’t think gyms were going to bounce back. (Which they did.) Or movie theaters. (The jury is still somewhat out on that topic.)

But I never once thought that office buildings wouldn’t bounce back. They’re too important on too many levels to too many people (i.e., mostly management). Consider how:

  • Training new hires becomes much more convoluted when everyone is situated in their own home instead of in a collective workspace. The value of face-to-face, hands-on training is invaluable – and extremely altered over the phone or even Zoom.

  • Collaboration, in general, is trickier. Not impossible, but trickier nonetheless for the same reasons that training new hires is trickier. It’s simply easier to demonstrate how something could or should be done in person.

  • Remote workers can be (and often are) less committed, whether they want to be or not. The National Bureau of Economic Research received data in January 2023 showing they put in 3.5 less hours per week than their in-office compatriots.

On that last point, this stands to reason. Just think about how many distractions the home has. There are chores that need to be done, personal to-dos that are piling up, and – let’s face it – non-work “stuff” to watch that the boss can’t catch you on.

At the risk of stating the obvious, none of those out-of-office issues make executives like Jassy happy. Which is why he’s apparently officially had enough and is bringing everyone back in full-time.

The Benefits of Working From Home Can’t Beat the CEO Factor

I’m sure I have at least a few readers who want to chastise me by this point. So let me address the corporate benefits of working from home as well.

Because they most definitely do exist and are well worth considering, from the fact that workers are free from annoying fellow employees wandering over to their office space to squander their time… to actually getting to work on schedule because “work” is the next room over… to a more personalized environment that facilitates better results.

Employees also enjoy less gas money spent and a greater ability to better balance career and personal lives. Plus, let’s face it, so much of society got used to the pandemic status quo in this regard.

As a result, Fortune is now running the headline that Amazon employees are not happy with Jassy’s return to office (RTO) mandate. “I’d rather go back to school than work in an office again,” at least one declared. And WebProNews writes that:

Still others expressed their desire to be PIP’d, a term used when employees score low in evaluations and are given nearly impossible goals to meet before being fired when they can’t meet them.

But, if we’re going to be realistic here, they can complain all they want. And they can quit all they want.

I don’t see Jassy – a long-time proponent of in-office work – backing down. If anything, I see him fueling the full RTO movement much further.

Who knows. Maybe some individuals can successfully lobby to keep their current work-from-home situations. But ultimately, it’s their case to make, not their decision.

CEOs make that ultimate call, and they overwhelmingly want employees back.

According to Resume Builder, as of August:

  • Nine in 10 companies with office space will have returned to the office by 2024.

  • [The] majority currently track or will track employees to ensure in-person attendance.

  • 72% say RTO has improved revenue.

  • 28% say their company will threaten to fire employees who don’t comply with mandates.

The sands do seem to be switching.

So does favor toward publicly traded office landlords. As you can see below, sector-specific real estate investment trusts (REITs) are finally beginning to bounce back:

Source: Yahoo Finance

And they should have more room to run from here.

I’ll just stress that I still very much prefer those office REITs situated in the Sunbelt. That’s where I’ve parked or am looking to park my money due to the region’s increased population and business appeal.

Incidentally, that business appeal has Amazon expanding into Nashville with a brand-new office building in the making. And there’s no telling what other companies will follow in its footsteps!

Regards,

Brad Thomas
Editor, Wide Moat Daily