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Amazon shifts return-to-office stance, says remote work is OK 2 days a week

Katherine Anne Long, Heidi Groover, Paul Roberts, The Seattle Times on

Published in Business News

SEATTLE —Amazon has softened its stance on remote work, announcing in an internal memo Thursday that tech and corporate employees can continue working from home two days a week once COVID-19 restrictions are lifted.

Most of Amazon’s 60,000 Seattle-area corporate employees will also be allowed to work remotely from a domestic location for four full weeks each year, according to a copy of the memo seen by The Seattle Times, which was later posted on Amazon’s blog.

“Our thinking is predicated on what we believe will be most beneficial for customers, while also trying to give employees more flexibility in their work environment and lives,” the memo said. Many Amazon employees will start heading back to offices as soon as local jurisdictions fully reopen — July 1 in Washington state — with the majority of workers in offices by the beginning of September, the company has said previously.

The announcement, Amazon’s first big update to its return-to-work policy since saying in March that it envisioned a return to “an office-centric culture” by autumn, was greeted favorably by employees. The move, while not expected to greatly affect the market for office space, may cause continued price escalation in out-of-town homes and apartments, and could throw a wrench in downtown Seattle’s post-pandemic reopening.

The new policy further underscores the differential treatment of Amazon’s corporate employees compared to its hundreds of thousands of U.S. warehouse workers, none of whom will be able to work remotely and who sustain injuries at rates above the industry average.

Amazon’s new policy for corporate employees follows backlash from some Amazonians to what they interpreted as the expectation that they would have to return to the office full time once states reopen from coronavirus restrictions.

Some tech companies launched recruiting campaigns that seemed targeted in part at those Amazon workers’ dismay over an end to remote work.

“Your company doesn’t embrace remote work or hybrid working??” Twitter Vice President Tracy Hawkins asked on LinkedIn the day after Amazon’s announcement in March. “Leave them in 2020, we’re hiring.”

While some Amazon employees predicted that the company’s prior stance on returning to the office could cause defections, many reacted positively to the news Thursday.

“My family is fully vaccinated. I’m not very worried about coming into the office, but I hate open floor plans and I like working from home,” said one Amazon software engineer. He lives in downtown Seattle and can get to work easily, he said, but prefers his home office — acknowledging that he’s “super privileged even having something close to this choice.” The engineer requested anonymity because he was unauthorized to speak with the media.

“No one in my management chain seems eager to push folks back into the office,” he said.

Amazon’s new stance on remote work mirrors that of other tech employers.

Google and Apple have both said they’ll allow two work-from-home days each week; both companies gave employees the option to work remotely full time some weeks each year. Facebook and Microsoft have said most employees can ask to continue working remotely, while Twitter and Slack have gone further, announcing a transition to an almost entirely remote workplace.

Demand for office space continues

So far, the permissive remote work regimes of many tech tenants do not seem to have affected investors’ long-term bets on the Seattle-area office market. Though office rents are basically flat, foreign investment in local office buildings has continued, in part because of the perceived safety of tech tenants like Amazon.

Part-time work-from-home arrangements “should not have a significant impact on the rate of recovery for the office market in Seattle/Bellevue,” said Chris Kagi, associate director at the commercial real estate firm Savills.

A mix of work-from-home and work in the office is “the middle ground between employer and employee needs,” he said. “This will cause office users to rethink how they use their space, but it still means there will need to be a physical location to touch down and congregate.”

 

Amazon views its offices as long-term investments and sees value in maintaining space for employees to gather in person, spokesperson Jose Negrete said in an email. The company is Seattle’s largest office tenant and is rapidly scaling up its Bellevue office footprint to hold 25,000 employees by 2025.

Inflating the cost of suburban housing

In the housing market, hybrid work could continue driving demand outside of Seattle, where rents and home prices have climbed.

“For some time now we have been seeing homeowners ‘cash out’ of King County and head to Snohomish, Pierce, and Kitsap counties where they can buy a home and either put down very large down payments — or pay all cash. Those working at [Amazon] are likely to do the same,” said Windermere chief economist Matthew Gardner.

But the most affluent may not have to choose. Javila Creer, a Seattle-based broker who says most of her clients are tech workers, said well-off homebuyers went after second homes in outlying locations like Suncadia and Leavenworth during the pandemic. “I bet now some will live in those places more full time and then have a smaller place in the city,” she said.

For renters, the pandemic drove down prices in once-hot Seattle neighborhoods like downtown and South Lake Union. Now, rents in those areas are “essentially flat,” said CoStar analyst David Whitmore. Amazon’s Thursday announcement could dampen demand in Seattle and Bellevue, “but that impact might be modest,” he said.

More rattling could be Facebook’s new remote work policy. In Bellevue, where Facebook plans to occupy nearly 1.2 million square feet in the under-development Spring District, some apartment developers and landlords “have likely been counting on well-paid Facebook employees generating demand for their properties,” Whitmore said.

With those workers instead able to choose from neighborhoods all over the region, “this increased competition could impact the ability of Bellevue landlords to put through rent hikes in the coming quarters.”

Effects on downtown businesses

Amazon’s new policy could also add to the hardships of South Lake Union business owners who have seen foot traffic through the neighborhood collapse. In pre-pandemic times, most of Amazon’s 60,000 Seattle-area employees commuted to the office daily. So far, few have returned.

The return of workers to offices “is an essential component of downtown’s recovery,” said Downtown Seattle Association president and CEO Jon Scholes. “That’s why it is more important than ever for Seattle to be a competitive place that can attract new employers and be a place where our existing employers want to grow and add jobs. New jobs mean new customers for downtown small businesses and arts and cultural organizations.”

More than 450 downtown retailers, restaurants and other street-level business locations have closed permanently in the 16 months since the pandemic sent office workers home, according to a Downtown Seattle Association survey. Of the roughly 175,000 people who worked in downtown offices before the pandemic, 80% continue to work remotely, according to DSA data.

But restaurateur Tom Douglas, who has two downtown locations — Serious Pie and Seatown Market & Fishfry — and plans in coming weeks to reopen several eateries that closed last year, said Amazon’s work-from-home policy was just one among a slew of challenges facing the Seattle restaurant industry.

“Amazon just needs to do what’s best for them,” said Douglas. “I can’t worry about it. You know, it is what it is and so we’re just going to go about our business and try and get things open as we can.” Two of his closed restaurants were in Amazon-owned buildings.

The restaurant industry’s labor shortage “is probably a bigger issue at the moment,” Douglas said. As he tries to hire staff to reopen downtown locations, he is competing against “corporate cafeterias” that are able to “pay at a different scale and offer benefits on a different scale than we can,” Douglas said.

“Whether Amazon comes back full or half or whatever,” Douglas said, “there’s other worries … that we have as a business.”

©2021 The Seattle Times. Visit seattletimes.com. Distributed by Tribune Content Agency, LLC.