Good morning!
Executives say they want workers back into offices for all kinds of reasons. But, as my colleague Jane Thier points out in a recent story for Fortune, there’s another less-talked-about issue driving decision making: office leases.
Half of companies that currently rent office space say that these contracts have affected decisions to bring workers back, with 16% saying they’ve had a “major impact,” according to a recent study from résumé-building platform Resume.org. While many of these companies (43%) locked into leases prior to 2019 (and the pandemic), 27% signed agreements between 2020 and 2022 and 30% signed in 2023 or later.
Nearly 30% of companies plan to require workers to come in five days a week by 2025, and 73% plan to mandate three days per week or more, the study found. Additionally, half of those with leases say they don’t expire until at least 2028. When they do, a quarter of companies plan to decrease the office space they have, or at the very least, make better use of it.
And it’s likely many of these companies may have to move, renovate, or reorganize their spaces if they can’t accommodate workers. Some large companies such as Amazon and AT&T are finding that one of downsides of sudden RTO include not having enough desks to handle the flood of workers. After consolidating its physical office presence during the pandemic, AT&T may have to improve its facilities and workplaces, a spokesperson previously told Fortune.
Regardless of whether or not companies decide to enhance their physical office spaces, what is clear is that many employees aren’t thrilled about return to office mandates. Half of workers would rather look for a new job or quit than go back to commuting five days per week, according to a recent study from WFH Research, a research group led by Stanford professors.
“The folks that are fine to return to the office have been heading back in,” one of the study’s authors, Stanford economist Nick Bloom previously told Fortune. “Those that are left are increasingly resistant.”
Brit Morse
brit.morse@fortune.com
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