Salesforce Remote Work Decision Could Reshape San Francisco

(TNS) — Salesforce, San Francisco's largest private employer, will permanently allow most workers to stay home for two or more days a week, a major shift that could dampen downtown's economic recovery well beyond the coronavirus pandemic.

The cloud software company, which has over 9,000 San Francisco workers, said most staff will be in the office for one to three days per week. Workers who don't need to be in an office can be fully remote, while a minority of workers will be at desks four or five days a week.

The move could lead to a reduction in its office space, but the company said it didn't have immediate details on that. It's a sharp reversal from the years of real estate growth both in San Francisco and around the world. Salesforce and many of its tech peers pushed San Francisco's office prices to record highs, with many cramming employees into densely filled benches and desks.

With numerous tech companies like Twitter, Pinterest, Dropbox, Yelp and now Salesforce embracing remote work programs beyond the pandemic, the Bay Area's status as the premier tech hub, along with its urban economic vitality, is in doubt. Empty streets and shuttered storefronts may linger even as some workers are vaccinated and return to offices if others stay home or leave the region entirely.

The reassessment of office-space needs is broader than tech. Gap Inc. told employees Monday that it would consolidate its San Francisco offices and close a separate headquarters building for Old Navy in Mission Bay. San Francisco office vacancy rose to a 16-year high of 17.8% in January, according to real estate brokerage Cushman & Wakefield. The only significant new lease signed last year was an expansion by life sciences firm Vir Biotechnology, which took a portion of Dropbox's headquarters.

Salesforce is one of the city's biggest office tenants. It leases nearly two-thirds of its namesake Salesforce Tower, the Bay Area's tallest building. It also owns 50 Fremont St. and leases all of 350 Mission St., along with 546 Howard St., an unbuilt tower a few blocks away. Salesforce is buying Slack, which is headquartered at nearby 500 Howard St.

Salesforce said it was rethinking its workplaces and culture to give employees more flexibility and attract new hires from a broader geographic area. Facebook CEO  Mark Zuckerberg  has also said that the tech giant will be able to recruit from more diverse areas as it increases remote work. Google is also testing a flexible policy that requires employees to be in the office only three days a week.

"This work-from-anywhere model will unlock new growth opportunities that will help us drive greater equality. Our talent strategy is no longer bound by barriers like location, so we can broaden our search beyond traditional city centers and welcome untapped talent from new communities and geographies,"  Brent Hyder , Salesforce's chief people officer, wrote in a blog post.

Employee surveys show that nearly half of workers wanted to come into an office only a few times a month, but the vast majority wanted to have the option. Salesforce has 54,000 total employees and a market capitalization of $218 billion.

"The majority of our employees will go back to the office at least some of the time. And we've learned that 80% of our employees are hungry for the connection, camaraderie and innovation that come from gathering in person," Hyder wrote.

"To start, we'll be redesigning our workspaces over time as community hubs to accommodate a more hybrid workstyle. Gone are the days of a sea of desks — we'll create more collaboration and breakout spaces to foster the human connection that can't be replicated remotely," he added.

Business groups have warned that the corporate shift to remote work will lure people out of the Bay Area and hurt local government budgets and job growth. Some have argued that a slew of new taxes, many passed at the ballot, and high housing costs are crippling the region's competitiveness.

"We need to face reality: the workplace has fundamentally changed," said  Jennifer Stojkovic , executive director of SF.citi — the city's main tech industry trade group — in a statement. "As we think through the future of work and what it means for San Francisco, I implore our city leadership to consider the policies we are putting in place today — and whether or not these policies will help us grow the next Salesforce and remain competitive as the world's capital of innovation."

(c)2021 the San Francisco Chronicle. Distributed by Tribune Content Agency, LLC.