I've heard this a million times, but isn't that a sunk cost fallacy? They don't get their money back when people come back, and they can either stop renting or sell. They aren't charging employee's rent for using the offices.
Maybe? But it's human nature to feel a little better about shelling out cash on something if it actually gets used.
To make an analogy, let's say your kid insisted you buy them a car. Not some lame Toyota, it has to be a Ferrari (read: lavish office in expensive downtown location). They use it, they're happy. Then some event happens that makes them not want to use the car anymore, but for contractual reasons you still have to keep it around for several more years (read: pay insurance and maintenance). It doesn't ever get used, but you're still paying for it (read: paying for maintenance and utilities for a mostly empty office). You'd feel at least a LITTLE better if your kid at least attempted to drive the car a few times per week, but they just want to stay home and call you an asshole.
I strongly prefer WFH, but I get the thinking. Also keep in mind that city governments are probably breathing down the necks of these companies telling them to get workers back into the office ASAP because the local economy is going to shit without thousands of office workers buying Starbucks, going to lunch, etc. every single day.
Yes, what you describe is a sunk cost fallacy. I get it, people do fall for them, we're wired that way. But a public company with stockholders shouldn't make decisions like this. It's either better for the company to make the people come back, or it isn't. "The CEO has buyer's remorse" is not an argument for such a highly impacting decision.
You might be onto something with the cities asking for this, but I have not seen any data or anecdotes pointing to that.
Yes. It is a sunk cost fallacy. That doesn't mean that they're not engaging in it. The fact that it's named shows how common of a fallacy it is.
Amazon spent $2.5 BILLION on HQ2. It's not just a some normal office complex, but rather a massive custom complex with domes full of trees and all sorts of weird stuff.
It's the same thing with Facebook's MPK 2x, Apple's Apple Park, and Google's "circus tents". These buildings aren't just for housing people, they're statements to the companies' -- and through extension their executives' -- greatness.
They're modern day temples... and they're empty.
Selling or renting out these buildings is literally unthinkable for the executives, but also impractical. It's humiliating to have have to part with your custom shrine to yourself. You can't sell item because the only companies that have the money buy it, and the people to fill it, are your competitors, and they have their own shrines to fill. You can't subdivide it and rent it out, because the buildings are giant aircraft hangers that no one wants, and they're not easily subdivided due to the location of cafeterias and bathrooms.
So what do you do?
Exercise your capricious and unaccountable power to force the serfs back into the temple. You like seeing the building filled because it makes you feel important. They'll even admit this to an extent when they talk about the joys of seeing people in the office, being able to ask people what they're doing. If we want to be charitable, we can call it the primacy of management by random encounter.
But they know, we know it's all bullshit, because everyone has witnessed the growth and effectiveness of when the company was (almost) fully remote.
I like the way you put this… best plausible explanation (for me)
. In this regard upper management isn’t driven by data, like you said it’s mainly about them and how it makes them feel to be in control again.
