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Sometimes a trend that seems inevitable turns out to be a fragile creation of circumstances. For example, throughout the 2010s, a number of consumer technology companies raised venture capital to provide subsidized services, including Uber and Lyft for shared rides, and DoorDash and Postmates for food delivery. As I wrote this month, these companies have benefited from a low-interest environment in which investors have been looking for firms with world-beating ambitions to burn money and grow. Then the party was over: interest rates rose along with nominal wages, investors demanded profits, and now Uber is worth about $100 from here until the end of the quarter.

Lately, I’ve been wondering if the work-from-home revolution will suffer the same fate. Clearly, the pandemic and the rapid economic recovery have helped remote work in several ways. The coronavirus has closed offices and the ensuing labor market toughness has given workers the opportunity to quit their jobs, fight for more money and abandon the purgatory tradition of daily commuting.

But just as the Uber revolution for everything depended on a specific set of economic conditions that changed very quickly, remote work can be just as sensitive to abrupt economic changes.

To understand what I’m getting at, we unfortunately have to talk about the US economy, which is not very fun. Inflation stubbornly clings to a 40-year high, and nominal gas prices have set a record. The Federal Reserve is trying to cool demand by raising interest rates, even though energy prices are rising mainly due to global factors such as the war in Ukraine, which is limiting oil supplies. While a recession is not inevitable, the Fed risks destroying so much demand that the US will enter a recession in the next year or two. And even if growth does not turn negative, raising interest rates will almost certainly lead to less investment, lower growth, lower layoffs, and higher unemployment.

Thus, in the near future, management may take over labor. The corporate culture will be more like what the bosses want than what the workers want, and that could mean a lot more bums on the ground. Nearly 80% of employees say they prefer to work from home at least one day a week, according to a survey by Stanford economist Nicholas Bloom. But managers roughly divided to the question whether remote workers are as productive as office workers.

We are already getting small glimpses of how the bleak economic situation could burst the WFH bubble. A few weeks ago Elon Musk said his employees go back to the office or lose their jobs. At first, it looked like a direct threat from an eccentric CEO with a passion for office proximity. But a few days later, Tesla announced that it would likely have to lay off 10 percent of its workforce, suggesting the argument that Musk used the return-to-office threat to force one-tenth of its workforce to quit voluntarily without being forced to endure the humiliation of announcing big reduction.

This diabolical play is widely available. Several tech companies, including Apple, have tried (and in some cases abandoned) according to investor Jason Calacanis, a variant of this covert exit strategy. “These companies are too proud to fire people, so instead they say, ‘Go back to the office or quit!’ Calacanis told me in an interview. my podcast, Simple English.

Real estate billionaire Steven Ross articulated the flip side of this dynamic: prediction that just as employers can use return-to-office policies to push employees to quit, workers can return to avoid being fired. “Employers hesitated a bit because they didn’t want to lose their employees,” he said. bloomberg. “But I think when you go into a recession and people are afraid they might not have a job, that will put people back in the office. You have to do everything you can to keep your job and earn a living.”

Remote work is not just a macroeconomic development. This is a cultural trend that, like all trends, is susceptible to backlash. Here is a story that could have been told that would have led to the demise of the WFH. In companies that do not have a culture of remote work, many young employees are left to fend for themselves. During a recession, more offices can bring these young workers back into the office. As they build on each other’s skills and feel like their fortunes are rising, a skeptical WFH movement may form among Generation Z. Young workers will make viral TikTok about how older workers look like crap all day as they sleepily wander from their beds to their sofas. WFH is for chunky millennials! as well as Never leave the house – it’s a pity! there will be a general idea. The fact that remote work can be most challenging for the demographics most active on social media can lead to unintended consequences.

Despite all this, I am not prepared to predict with certainty that the recession will affect the remote work revolution for two reasons. First, recessions lead to bankruptcies, especially among firms with a disorderly cost structure (for example, paying outrageous amounts of money for office space you never use). As old office firms die, young companies operating from anywhere may rise up to fill their space. In this scenario, remote work will not disappear during a recession. It will advance one corporate funeral at a time.

Second, from a purely mathematical point of view, the most rational thing for a zombie office company during a recession is to cut spending on everything related to the office. “Many firms are managing to reduce office space and switch to full remote work,” says Adam Ozimek, an expert. economist and a supporter of remote work, told me.

The recession, if it comes, will be a stress test of the new phenomenon. Remote work flourished as the pandemic raged, when managers were desperate to retain employees and white-collar workers knew they had power. The question is what happens when some of these tailwinds weaken. “Some employers will respond to the slowdown with a return to the office plan,” Ozimek said. “Some may be content with leaving 20 percent of the workforce. But others can really defend their best talents and are willing to go out of their way to keep them.”

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