The big tech companies in Silicon Valley reside in dazzling buildings complete with their own sports fields and swimming pools. Footage from space shows how much the areas are currently deserted in the pandemic.
Anyone who works for the US payment service provider Paypal already started the weekend last Thursday evening. No matter on which part of the world. No matter in which position. Every eight weeks, Paypal employees enjoy the benefits of a four-day week, and Friday was another day off. The measure is a “balance to the workday, to switch off and recharge energy,” the company says. “Wellness days” is what Paypal calls these additional vacation days, which the company introduced in the middle of the pandemic. At the company headquarters in San José, California, the hallways are deserted on the days off, and there are hardly any vehicles in the parking lots.
But this is what it looks like all the time here at the company’s headquarters, right next to the airport in the Silicon Valley city of millions. Not just every eight weeks. Paypal, like so many tech companies in the U.S., is in-home office mode – and will probably stay that way for a while: “I don’t think we’ll ever go back to a pre-pandemic state,” Paypal CEO Dan Schulman said in an interview with U.S. media Bloomberg. “Some people will sit at home forever, others will be in the office more often,” but the vast majority of employees will work in a hybrid model including two to three days in the office, he said.
At the request of WirtschaftsWoche, Paypal does not want to comment on the exact utilization of the company headquarters or the regulations for the home office. From the all, however, it can be seen that hardly anything is lost at the company headquarters. While the search for a free space in the company parking lot was still a challenge in October 2019, the parking lot is currently almost empty of people, or rather cars. This is shown by satellite images from LiveEO.
While cars were still lined up closely in the parking lot surrounding the company building in October 2019, only about 20 outlines of cars can be made out at the end of September 2021, a year and a half after the outbreak of the pandemic.
There is a reason why Paypal does not comment on the current workload: The debate about a return to the office was much more emotional in the United States than in this country. The iPhone company Apple quickly ordered its employees back to the office: they were to work on-site again on three days a week, boss Tim Cook told the workforce in an e-mail in the summer: on Mondays, Tuesdays, and Thursdays. The employees rebelled and demanded more flexibility from the management.
Working from home is dividing the corporate landscape in Silicon Valley. Of all things, these companies, which like to present themselves as so progressive and employee-oriented, have been working through these questions since the outbreak of the pandemic: Office or home office? And if home office: how much is allowed? “Employees don’t want to give up the flexibility they discovered for themselves during the crisis,” says David Rouven Möcker, who heads real estate consulting in Germany at consulting firm PricewaterhouseCoopers (PwC). According to Möcker, employers now face cultural questions in particular: “How important is it to employers that employees also meet at a common location from time to time, that they exchange ideas here? Do I want to make it mandatory for colleagues to return to headquarters to create a shared atmosphere, or do I not care at all where in the world my workforce is located?”
Facebook, which has recently gone by the name Meta, answers these questions at least somewhat less strictly than Apple. Employees can work from home until January 2022, it says in response to a question from WirtschaftsWoche. Those whose work permits it could also apply for full home working beyond that. However, employees who return to the office at least partially will have to deal with a mandatory regulation: “As soon as our offices are open again at full capacity, employees who go to the office should spend at least half of their time in the office,” the company informs.
Currently, Meta’s headquarters in Menlo Park, which is located directly on the water, is open with “reduced capacity,” according to the company. Anyone who wants to come to the office needs a protective mask as well as a vaccination. Satellite images also show that the company’s employees seem to have taken a liking to the home office: As recently as October 2019, it was possible to observe from space how numerous employees’ cars literally constricted the buildings in the middle of the company premises. Only a few parking spaces were free.
In fact, in the middle of the pandemic, at the end of September this year, the parking situation is completely different: Even from space, it is now possible to make out the markings for the parking spaces that largely concealed the many vehicles before the pandemic.
The most prominent company site in Silicon Valley probably belongs to Alphabet subsidiary and search engine company Google: The Googleplex in Mountain View is just over ten minutes by car from Facebook’s campus. In addition to office buildings, fountains, and swimming pools, the site also features a dinosaur skeleton. While many of the cars here are parked underground, in the northeast of the site there are four buildings including their own parking lot on Crittenden Lane.
At the end of September 2019, even in the most remote parking spaces, numerous cars stood accurately side by side. Two years later, a number of vehicles are clustered, especially close to the building. Many other spaces are vacant. At Google, employees around the world can voluntarily work from home until Jan. 10, 2022. “The current plan is that from then on we will return to an arrangement of three days in the office and two days home office,” Google said when asked.
However, the company also does not want to comment on the exact workload in Mountain View. Since June, however, Google has been offering employees the option of applying online to work completely from home or to change their work location. Around 10,000 employees applied in the first wave, the company said. 85 percent of the requests were approved after a multi-stage review. According to the company’s response, slightly less than half of the applications were aimed at a full home office, while the majority of applicants wanted to change locations.
A few kilometers south of Silicon Valley sits a company whose business was boosted by the pandemic in a very special way: the video streaming service Netflix was able to increase the number of its subscribers by almost 17 percent during the pandemic and currently employs a good ten percent more people than before the corona pandemic. The share price has therefore almost doubled. At the company’s headquarters in Los Gatos, California, however, it only became emptier during this time, as the satellite images show.
In October 2019, there were even a few vehicles on the top deck of a parking garage, to the right of the four connected office buildings. In September of this year, however, this deck was completely empty, while the rest of the parking lot around the buildings also offers significantly more free parking spaces.
Behind the home office regulations, however, there are financial challenges for the companies in addition to the empty parking spaces. After all, if even spaces inside the dazzling and excellently equipped buildings remain empty in the long run, it costs the companies money. “In tech corporations, retail companies or even in public administration, a large part of the office work can be shifted to the home office with comparatively little effort,” says David Rouven Möcker. If the companies dismantle the excess space, it pays off regardless of the industry, Möcker says. In a study, Möcker and his colleagues at PwC have already shown that, despite conversion costs, the remaining term of the lease and the rent, remodeling offices is worthwhile for companies if only eight percent of the space is taken down. With a 20 percent reduction in space, savings of up to 12 percent of real estate-related costs are possible within ten years.
The Dilemma of the Big Names
Möcker has no illusions, however: “It’s absolutely clear that the huge corporate headquarters won’t shrink or sublease overnight.” Instead of selling, Möcker says, collaboration spaces are likely to be created in the tech corporations’ buildings first, “because many companies see the buildings as part of the corporate culture – at least for now.”
For example, the colors of the Google logo (blue, red, green and yellow) are omnipresent on the Google campus. It’s hard to imagine numerous other companies that don’t belong to the parent company Alphabet taking up residence on the Google campus. “Employees from outside locations could be brought into the headquarters, for example, instead of allowing new tenants, i.e. other companies, to move in,” says Möcker.
And indeed, the company’s campuses “have been the heart of our Google community, and the majority of our employees still want to be on campus at times,” Google says. The company is now building new types of configurable spaces for indoor and outdoor collaboration, it said.
“In contrast to our survey last year, currently only one-third of companies actually expect to reduce their space,” Möcker also says. “The other companies are not selling or leasing the space, but are building rooms and areas there for shared use or to promote the well-being of the workforce.” Then, for example, daycare centers, sports facilities or coffee bars would be created.
At present, however, such plans cannot always be implemented with the greatest certainty. “The sharp rise in the number of infections shows just how unpredictable the pandemic situation is,” says Möcker. Today, companies would make lease agreements much more flexible: “Instead of concluding lease agreements and sublease agreements for ten or twenty years, they limit them, usually to less than five years,” says Möcker’s experience. This allows companies to react at least somewhat more flexibly to external developments such as a pandemic.