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Friday, April 16, 2021

If Work Is Going Remote, Why Is Big Tech Still Building?

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Facebook, meanwhile, has been more aggressively planning to let its workers toil from anywhere. In May, after long emphasizing the importance of engineering hubs, Facebook CEO Mark Zuckerberg floated a new goal of 50 percent remote work. The same month, Facebook unveiled a refreshed design for its new campus in Menlo Park, dubbed Willow Village, with space for 3,400 workers and 1,700 homes. The company continues to expand its presence in other Bay Area cities, and Zuckerberg told employees that Facebook still saw a use for all of its current and planned space.

So what gives? It comes down, in large part, to simple math: Silicon Valley’s giants are growing too fast to loosen their grip on physical space—even if, in some cases, they might want to. At the time of Zuckerberg’s remote work comments, internal surveys showed that most employees were eager to get back to the office, and Zuckerberg said the transition to remote work could take 10 years. Meanwhile, in the last year alone, Facebook grew its headcount by 13,000, mostly in product and engineering, putting the total number of employees at more than 58,000. Alphabet added 16,000 for a total of 135,000. Those figures don’t include thousands of contractors who keep their campuses running.

In the depths of the pandemic, “it’s easy to lose track of the bigger picture,” says Mark Muro, a senior fellow at the Brookings Institution who studies how cities attract high-tech development. For decades, Muro has been searching for evidence of decentralization—the spreading out of talent and wealth enabled by the so-called “death of distance.” The idea was that technology would make it possible for people to work from anywhere, making offices and cities less relevant. What we got was the opposite. Fast-growing tech firms clustered in a few cities, as did what Muro defines as “innovation” jobs in science and technology. Other cities grew, and technology companies did expand elsewhere. But tech hubs like San Jose and Seattle simply grew faster.

The latest wave of growth in those places was largely defined by Big Tech, but it builds on past advantages, explains Margaret O’Mara, a historian at the University of Washington who has chronicled Silicon Valley’s many presumed deaths since the 1950s. The tech companies of today grew out of the benefits of an unusual setting—universities, infrastructure, the wealth and talent of the local semiconductor industry (itself seeded by lucrative government contracts). Those new companies then applied the benefits of proximity to their workplaces. She points to early plans for Pixar’s campus, when founder Steve Jobs conceived of a single, centrally located bank of bathrooms. The point? Serendipitous innovation. (Other bathrooms would be built.) Companies like Google would come to set the agenda for a generation of offices in which built-in perks and services blurred the lines between work and life.

This emphasis on face-to-face collaboration turned these growing offices into centers of gravity themselves—nuclei for investors hunting for Google talent, marketing firms that fiddle with the Twitter logo, manufacturing firms that help Apple fabricate new prototypes. Then there are the startups, which emerge and draw from the big tech talent pool and often are absorbed back in. Despite perennial complaints about the Bay Area—its high costs and taxes, its social problems—that engine continues to hum along nicely. “It’s not just proximity to the big companies,” O’Mara says. “It’s proximity to the ecosystem that the big companies grew out of. The whole jam.”

The pandemic has accelerated changing ideas about proximity, but many were already afoot pre-pandemic, she adds. A natural consequence of success is that companies do spread out. They establish bases elsewhere—often choosing relevant academic hubs for specialized teams, and perhaps bigger hubs in major cities home to a broad swath of talent. (Hence the recent midtown Manhattan buying sprees of Amazon, Facebook, and Google.) Remote work was on the upswing prior to the pandemic, especially among smaller firms. For now, though, the decampments tend to be exceptions—often larger, older companies that need to slim down and cut costs. As San Jose’s Walesh notes, the most high-profile pandemic departure from her city—the headquarters of HP Enterprise to Houston—wasn’t much of a departure at all. The tech workers are mostly staying; the difference is where the taxes are filed.

With most people still working remotely, it’s hard to draw long-term conclusions, says Robert Sammons, director of Bay Area research for Cushman & Wakefield, a real estate brokerage. One thing that is known, he says, is that markets like San Francisco were overheated before the virus. Costs were little barrier to wealthy tech giants, but smaller companies were being pushed out, and even the largest firms had trouble finding enough space downtown. The tech campuses were changing too. They had become more dispersed, reflecting a desire to be closer to where people actually live. New proposals have included more housing and less office space, often in response to pressure from communities facing spiraling housing costs, but also reflecting the changing needs for the companies themselves. Google’s San Jose project is typical of that model: closer to where many of its workers live, and not every inch of space needs to hold a desk.

This srticle was first published on WIRED

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