Ever since the pandemic, the labor market power has been squarely in the hands of employees. Big companies keep hiring and leasing office space like crazy in a land fueled by Covid stimulus checks and low-interest rates. Not enough people to do the work! Stock values were high and business was booming. Big corporate office occupiers were just waiting for the world to go back to normal. After the major Covid scare was over, employees didn’t want to come back, or else they would quit and find another work-from-home job.
Now, big layoffs at companies like Twitter and Facebook are going to dominate headlines. What this trimming of the fat is going to do is make the remaining work-from-home holdouts rethink their strategy. Do they want to risk being let go? Are they part of the team if they only work remote from home? Will they miss out on promotion opportunities because they are just a remote number?
Time will tell, but I think the power is slowly shifting back to the employer. Enough fear and doubt about the economy will have employees more interested in keeping a good job and will start showing more face time in the office. I predict a 12-18 month swing of power back to employers which will help office space be more regularly occupied than the ~60% we are seeing in Austin right now. Those companies that chose to keep a physical office presence should see more desks occupied as the recession takes hold. Fear is a great motivator.