This is an audio transcript of the Working It podcast episode: ‘Amazon ends remote work. Will other firms follow?’
Kevin Delaney
I think if you look at Amazon specifically, this is not a lay-off. But if you tell people that they need to come in to the office five days a week, you have to expect that you’re gonna lose some number of workers.
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Isabel Berwick
Hello and welcome to Working It from the Financial Times. I’m Isabel Berwick.
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Many of us take flexible and hybrid work for granted. We just accept it’s here to stay. But not at Amazon. In September, the company’s CEO, Andy Jassy, told staff they’d have to work in the office five days a week from January. He may not be alone. A new survey of CEOs carried out by KPMG shows that 83 per cent of them expect a full return to the office in the next three years. So is Amazon’s new policy on remote work a harbinger of what’s to come? Will we all be back in the office five days a week, like we used to before the pandemic? To find out, I’m going to speak to Kevin Delaney, the editor-in-chief of Charter, a media and research company focused on the future of work, and to my friend and colleague, Emma Jacobs. Let’s get started.
There’s been one topic of conversation this week in offices about offices. It’s Amazon CEO Andy Jassy’s memo to staff ordering them back to the office five days a week. Emma, how has that been received internally and externally? You wrote a very well-read column about it.
Emma Jacobs
It is the topic that will never die. I find that anyone you meet is happy to talk about how many days a week they go into the office. But people have positions on it and it’s a way of flexing muscle and looking like you’re a strong leader, characterising the other side as kind of pathetic and all these other things. So it’s become a kind of political potato that people throw between two sides. I’m surprised at how horrible people are about it, really.
Isabel Berwick
Yeah. Kevin, are you surprised by the enduring fierceness of this debate?
Kevin Delaney
Yeah, I am surprised. You know, we’re four-plus years in here and we’re still talking about this. The research is pretty clear that hybrid working — so in the office two or three days a week — leads to more engaged workers. People are more productive. It’s better kind of all around.
And then you have these CEOs who in the face of that don’t have particularly good arguments for why people should be in the office five days a week in the chair, 9-to-5. This is against the backdrop of a workforce that we know from surveys is pretty disenchanted and disengaged. You know, the research shows that a third to 40 per cent of workers actually, given the opportunity, think that they’re gonna look for a new job over the next year.
So it’s that kind of fraught context and the hassle of commute that are reasons, important reasons why this issue continues to be one we’re talking about.
Isabel Berwick
Is it that no one’s telling the CEO they’re wrong? Are they surrounded by yes people?
Kevin Delaney
I think that is probably an issue. The question is whether they’re being told or whether they’re hearing it. And, you know, I think one of the issues is that there are groups for whom hybrid working is particularly welcome. That includes caregivers who are often women employees of colour; there’s lots of research about that.
And that’s not the profile of your average CEO. You know, the average CEO is older than the average employee. So they’re arguing from another era and another demographic perspective. And as a result, there’s a real disconnect there that we’re seeing playing out with this issue.
Isabel Berwick
So, Emma, I wanted to bring you in here because you commented in your FT column that some HR chiefs are under pressure from the CEO to see more physical presence on site due to personal preference or nostalgia. And there’s a great reader comment under that from someone called Forward: “It’s 99% of the explanation. CEOs tend to be extroverts and insecure overachievers who need to see people physically to feel good and to be validated all the time. Of course they want people in the office full time. Many genuinely fail to grasp that an introvert might be more productive at home without the pressures of socializing.”
So is it nostalgia?
Emma Jacobs
It is. I do think that it is. One of the problems of getting older is giving up on the idea that just because you’ve been through something, you have to impose it or it’s the right way to be for younger generations or different kinds of workers.
I got an email from somebody on the back of the column that said, you know, they had been ordered in by a manager because it was good for talking to people. And then when they came in, nobody talked to this person. So it was sort of like wish fulfilment rather than kind of, you know, really kind of getting to grips with what’s going on somewhere. I think one of the biggest frustrations . . . I don’t care if Amazon wants to bring people in five days a week, if they know for sure that that will work better for their workforce.
All sorts of factors play into it, but it’s the lack of evidence that seems so weird in companies that are so keen to talk about meritocracy or talk about sales as being the kind of driving force of how we judge things. And then when it comes to this thing that they’re so desperate to implement, there’s very little in the way of data. And it just does seem odd. Is there like a kind of feeling or a vibe that they want to create?
I just find it very disappointing, really, when they look at the office and say, why is nobody coming in five days a week? They don’t tend to ask anybody. So why are they not asking the people that aren’t coming in? They might have all sorts of good reasons.
Isabel Berwick
Yeah. Kevin, you do a lot of research. What does your research say works?
Kevin Delaney
I mean, the research is really clear in, two or three days a week in the office with your team is a recipe for the most productive, engaged, loyal workforce.
Another thing we know is that periodic off-sites with your team or something like that sort of team gathering actually make a really big difference for distributed teams. And there’s something like a four-month trust halo if you actually spend some concentrated period of time with your team, which research suggests is about half-social and half-professional time.
And so we’ve learned over the last few years the best practices for managing teams like this. And when I hear companies say that workers need to be in the office five days a week, it ignores the fact that workers could be in a hybrid configuration, which is two or three days a week. But it also is, in my view, pretty lazy because it means that they’re not engaging with what the best practices for management in 2024 are, not in 2018 or 2008 or 1998. And that feels like what this whole CEO reflex reflects.
Isabel Berwick
Yes. So the data’s obvious. So why are these leaders not engaging with the data?
Kevin Delaney
I would say there’s one element — and I don’t know this to be true in Amazon’s case — but if you look at tech companies generally, there are lists of lay-offs and there’ve been waves and waves and waves of lay-offs this year by companies that we think of as being among the leading tech companies.
And part of it is they feel like they overhired, you know, during the pandemic and they’re getting rid of some people. And part of it is their practice is just to continuously lay off parts of their company and then hire people who are AI engineers or whatever the next thing they feel they need is.
And so I think if you look at Amazon specifically, this is not a lay-off, but if you tell people that they need to come in to the office five days a week, you have to expect that you’re gonna lose some number of workers. And I’ve seen estimates that this could be somewhere north of 10 per cent of workers who decide to stop working for Amazon because it just doesn’t fit with their lifestyle or the sort of work environment that they want.
And so, you know, there is one critical view of this, which is some CEOs are using this to trim your staff without having to pay severance to people who leave. And what we know from other research in the tech industry specifically is that when you require people to be in the office 100 per cent of the time, it’s the more experienced, longer-tenured workers who tend to leave companies. Researchers have studied this. And so, you know, one way to view this is it’s a way to shed your most expensive staff without having to pay severance.
Isabel Berwick
I mean, certainly on LinkedIn, the prevailing view seems to be that this is a lay-off by stealth. Emma, is that what you’ve been hearing?
Emma Jacobs
I mean, those . . . without knowing Andy Jassy’s inner mind, I mean, he did say in his memo that he wants to lose a layer of management because he talked about meeting bloat — the pre-meetings for the pre-meetings and so on.
So I think that, you know, he didn’t make the connection himself; I think that would be a step too far. But I’d be surprised if he wasn’t using it as a way of doing so, as Kevin says.
Isabel Berwick
Yeah. And on a related topic, I think one of the interesting side effects or the post-pandemic effects has been a bump in women’s ambition and women’s promotion at work. Are we starting to see that women are losing out? A five-day-a-week mandate is gonna affect a lot of women and caregivers, isn’t it?
Emma Jacobs
I mean, I guess that . . . on a general level, people are being much more pragmatic than these kind of headline-making stories suggest. So there is more flexibility, I think, generally across companies. The pandemic has taught most organisations that flexibility works both ways.
And so I think that although there is a kind of creep with companies like Goldman Sachs or Boots saying that they want people back in the office, generally there is more flexibility and I think that is allowing people with caring responsibilities to manage their days better. But I think that if we do go back to the office five days a week, long hours in the office, you know, the kind of greedy job scenario, then it is gonna be difficult for women that have traditionally taken on more of the caregiving role.
Isabel Berwick
Yeah. Kevin, are you hearing from groups of workers who are worried about this sort of trend?
Kevin Delaney
Yeah, in the US context also, caregiving is in a real crisis. And so people would have caregiving responsibilities, which if you look not just about early child care, but also elder care and all the different dimensions this can take is actually a very significant part of the workplace. There’s very little support for them and removing flexibility for this population means that you’re gonna lose some of them.
And so I think, you know, if you require people to be in the workplace five days a week, the profile of your workforce is likely to include fewer caregivers, also fewer people of colour. It’s a less diverse and less caregiving workforce, which, you know, is a choice that organisations could probably make but it’s not one that the research supports as being the best recipe for long-term performance of organisations if they’re so homogenous.
Isabel Berwick
Is there some way in which this plays tangentially into what we might perceive as the retreat of diversity, equity and inclusion in American workplaces, Kevin?
Kevin Delaney
I think that it plays into a relatively looser labour market. So we’re seeing it in all sorts of numbers, and the number of people quitting their jobs voluntarily has dramatically reduced. We’re seeing the number of open jobs that are not filled, dramatically reduced also. And the result is that employers actually feel that they’re emboldened in this sort of balance of power with employees. And so they can kind of . . . People will have to basically just go along with the policies that the CEO wants for fear of losing their jobs and not actually having great confidence that they would be able to find another job.
So I think I would say that that’s the bigger demographic trend. The broader trend is sort of emboldened employers who are also either underfunding or being more quiet about any DEI initiatives. They just have more leeway to do things like that, given the current state of the employment market, which I think is a very short-term thing, because we know probably unless AI dramatically changes things in the next few years, there will once again be a more acute shortage of labour.
Isabel Berwick
Yeah. And on the AI piece, I wanted to read out a comment from someone called London Reader under Emma’s article: “One of the most interesting aspects of these WFH/RTO discussions is the absence of commentary on how significantly the technology has moved on over the last 5 years. It is almost never cited in these discussions, which all seem to suggest this is just some kind of culture war. Depending on the kind of work you do, many of the collaborative computerised tools now available probably make you more productive when you’re sitting in an online meeting rather than in the office. But instead most of the debate seems to be centred around what the ‘good old days’ were like.”
Why aren’t we talking about tech?
Kevin Delaney
I think it’s a really good question. And the just basic fact is that we shifted to pretty much fully remote using technology that wasn’t necessarily ready for it. And actually, companies did well and were just as productive and showed that we could operate that way. We are now four years into this, and the technology as we all know, has evolved. Our level of comfort with it, the mores and practices around it have developed.
And so I think it is a real blind spot. And I think part of the premise of the CEOs calling people back in the office is that, you know, there’s this great interchange of ideas and there’s the water cooler where people bump into other people. And the truth is, like, the research shows that a lot of that was never actually true. And if you weren’t sitting within 20ft of someone in your office, you barely interacted them, water cooler or not. So a lot of that is this sort of nostalgic.
But technology can be deployed, you know, in some ways even better than relying on some random water cooler encounter that is probably not gonna happen. There are tools and technology that actually can enable even that part of it.
Isabel Berwick
We haven’t touched on Gen Z and their preferences for work-life balance and boundaries. Emma, are Gen Z gonna do for return to office mandates? Is the demographic pressure gonna be in favour of the younger workers?
Emma Jacobs
It all slightly depends on whether, you know, who holds the power. And, you know, Gen Z could like . . . Whatever they want to have, you know, unicorn rides or whatever they want. But, you know, it depends on who’s paying and who’s willing to do it.
Isabel Berwick
Yeah. Kevin, what are you hearing about Gen Z?
Kevin Delaney
Yeah, I think you know, what Emma said, a lot of their data are like fairly contradictory. And I think one thing to think about is a lot of Gen Z workers, my sense from the research is that they are looking for opportunities to learn, to connect with their colleagues, to socialise, to be mentored. And part of that disconnect is that when they’re going into the workplace, they’re actually not experiencing that.
So they’re commuting in and then they’re on zoom calls and these older colleagues, who in theory are supposed to be mentoring them, are not actually doing that. And so I guess what I would say is that you, again, like a sort of hybrid set-up that has deliberate structured approaches to things like connecting people with their colleagues to build trust and engagement and actually mentoring and learning and teaching as part of the time that you spend in your office. That seems like the thing that everybody wants, regardless of generation.
Isabel Berwick
I mean, that is one thing that drives me insane about this whole discussion is this idea that I know that the apprenticeship model where you hear, overhear a lot of how to conduct yourself in meetings or how to learn how to talk on the phone or all these things, you know. It’s so lazy. It’s like the easiest thing to do. I don’t have to invest in your mentoring or your training. All you have to do sit next to me. I mean, it’s the most pathetic thing. Drives me mad. OK, I’m gonna wrap it up. Kevin, to bring it back to Amazon, do you think this move says more about Amazon and how it manages its workforce and about the future of hybrid work? You know, is this a harbinger or an outlier?
Kevin Delaney
So I think if you look at the data about hybrid work, the population that is in a hybrid configuration of workers has actually been pretty flat. And so the data don’t suggest that such a wave has started already. And the question now is whether Amazon and others, sort of embolden other CEOs to try and enforce such mandates.
Amazon is known within the tech industry as a company that compensates its workers very well, but has a culture that’s more hard-driving, less flexible, less worker-friendly in some ways. And so it’s not surprising or inconsistent with that, that Amazon would be really sticking its neck out on this. And that suggests to me that it’s not necessarily an indicator that so many companies will be following Andy Jassy.
Isabel Berwick
Kevin, thank you so much for joining us from New York.
Kevin Delaney
Thank you, Isabel. Thank you, Emma.
Isabel Berwick
And Emma, thank you.
Emma Jacobs
Thank you. Nice to speak to you, Kevin
Isabel Berwick
It’s too early to say whether the tide is really turning on remote work. And as Kevin said, there’s a big difference between saying people have to work in the office and actually getting them there. But employers are in a better position to call the shots this time around. So maybe don’t block book that 2pm yoga class just yet.
This episode of Working It was produced by Mischa Frankl-Duval. The executive producer is Manuela Saragosa, and Cheryl Brumley is the FT’s global head of audio. Thanks for listening.
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