Twitter is closing its Seattle and Singapore places of work as a part of steady cost-cutting measures underneath its new proprietor, and CEO Elon Musk is directing staff to work remotely in these places.
Despite Musk’s earlier declare that those that work remotely are solely “pretending to work,” Musk nonetheless banned distant work at Twitter after taking management of the corporate in early November.
So what’s the cause for his change of thoughts? Apparently, it’s the expense of the corporate’s Seattle headquarters, together with lease and different providers resembling cleansing and safety.
The proven fact that Musk, a fierce critic of distant work, has admitted its cost-saving advantages reveals how vital distant work shall be to the U.S. financial system sooner or later. It reveals how false many headlines declare {that a} coming recession will put an finish to distant work as a result of a weakening labor market will give managers extra energy to require staff to return into the workplace.
But in follow, the impression of a recession on distant work goes past the fundamental leverage of a shrinking labor market. Of course, it’s true that employers have extra energy throughout a recession. They should concurrently give attention to optimizing the return on their staff’ investments.
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Managers have extra freedom to decide on in keeping with their private preferences throughout financial upturns. But in downturns, they could have to train extra restraint and rely extra closely on information to make selections which can be financially useful to the corporate, resembling Musk’s choice to have Twitter staff work remotely to chop prices. Remote work advantages from this emphasis on enterprise success over particular person preferences.
It has been confirmed that working remotely is extra productive than working in an workplace. Therefore, encouraging distant work is vital in occasions of cost-cutting, as a result of increased productiveness means firms want fewer staff to do the identical quantity of labor. In the summer time of 2020, distant staff had been 5% extra productive than workplace staff, in keeping with a Stanford College examine.
As firms improved their distant work practices and invested in know-how that enabled distant work, the productiveness hole elevated to 9% by spring 2022.