Back to the Office for Tech Workers

[Anonymous]

That has been true since 2009. However, with 7% inflation they cannot get away with dropping anymore helicopter money. I think we see the Fed is actually allowing a crash/recession this time. However, ultimately no doubt they will make sure the banks are bailed out as usual.

[sdrealtor]

[quote=deadzone]That has been true since 2009. However, with 7% inflation they cannot get away with dropping anymore helicopter money. I HOPE we see the Fed is actually allowing a crash/recession this time. However, ultimately no doubt they will make sure the banks are bailed out as usual.[/quote]

FIFY

[Coronita]

[quote=deadzone]Problem is if there is layoffs at Shopify or whatever it will be due to after effects of market crash and recession from the bursting of the bubble. So in that scenario most of the industry will be laying off.

Back to the original comment, sure there will probably some companies offering fully remote for a while. However, the point is majority of folks are going to be heading back to the office, at least part time, very soon. And the total pool of fully remote workers will be going down from the peak of Covid. How much this affects RE in San Diego, is debatable, but it is not a positive.

Not every employee or engineer can act like an entitled baby and just quit and move to another company because they don’t get their 100% remote gig anymore. That only works now, if at all, because the job market is so tight due to all of the Fed money printing. If/when the Fed turns off the spigot, there will be a recession and the job market will not be tight anymore.[/quote]

For every company laying off there are a bunch of VC funded new companies. Nothing has changed really. Shopify even doesn’t have a major footprint in CA. Also a bad example, Shopify has been routinely hiring and firing well before their latest wall street numbers. It’s part of their “culture”…

Shopify actually IS one of the companies that count on remote workers to get around the high cost of employee Bay Area employees.Because they know they can’t compete with the FANG companies for talent with deeper pockets.

https://www.glassdoor.com/Reviews/Employee-Review-Shopify-RVW41454067.htm

Besides, given their large customer base, there’s plenty of contracting and consulting work and offshoot products built on top of shopify . It’s not just the company it’s the entire ecosystem of developers and talent to support all the large customer install base. Similar to what Salesforce.com did.

[Anonymous]

[quote=sdrealtor][quote=deadzone]That has been true since 2009. However, with 7% inflation they cannot get away with dropping anymore helicopter money. I HOPE we see the Fed is actually allowing a crash/recession this time. However, ultimately no doubt they will make sure the banks are bailed out as usual.[/quote]

FIFY[/quote]

My hope has nothing to do with it. Fed can’t print money forever. Sooner or later there has to be a crash in order to have another rescue and re-inflate the next bubble. That’s how bubble economies work. TPTB (i.e. WS bankers) control when the crash happens. Whether this is THE crash or not is yet to be determined, but there will be a crash.

[Anonymous]

[quote=Coronita][quote=deadzone]Problem is if there is layoffs at Shopify or whatever it will be due to after effects of market crash and recession from the bursting of the bubble. So in that scenario most of the industry will be laying off.

Back to the original comment, sure there will probably some companies offering fully remote for a while. However, the point is majority of folks are going to be heading back to the office, at least part time, very soon. And the total pool of fully remote workers will be going down from the peak of Covid. How much this affects RE in San Diego, is debatable, but it is not a positive.

Not every employee or engineer can act like an entitled baby and just quit and move to another company because they don’t get their 100% remote gig anymore. That only works now, if at all, because the job market is so tight due to all of the Fed money printing. If/when the Fed turns off the spigot, there will be a recession and the job market will not be tight anymore.[/quote]

For every company laying off there are a bunch of VC funded new companies. Nothing has changed really. Shopify even doesn’t have a major footprint in CA. Also a bad example, Shopify has been routinely hiring and firing well before their latest wall street numbers. It’s part of their “culture”…

Shopify actually IS one of the companies that count on remote workers to get around the high cost of employee Bay Area employees.Because they know they can’t compete with the FANG companies for talent with deeper pockets.

https://www.glassdoor.com/Reviews/Employee-Review-Shopify-RVW41454067.htm

Besides, given their large customer base, there’s plenty of contracting and consulting work and offshoot products built on top of shopify . It’s not just the company it’s the entire ecosystem of developers and talent to support all the large customer install base. Similar to what Salesforce.com did.[/quote]

So when Fed turns off the spigot, there will be an overall recession and tech will be hit very hard. Less jobs industry wide. San Diego and everywhere. Remote and office. At this point, employees will have a lot less leverage to “Demand” that they be allowed to work at home.

[Coronita]

[quote=deadzone][quote=Coronita][quote=deadzone]Problem is if there is layoffs at Shopify or whatever it will be due to after effects of market crash and recession from the bursting of the bubble. So in that scenario most of the industry will be laying off.

Back to the original comment, sure there will probably some companies offering fully remote for a while. However, the point is majority of folks are going to be heading back to the office, at least part time, very soon. And the total pool of fully remote workers will be going down from the peak of Covid. How much this affects RE in San Diego, is debatable, but it is not a positive.

Not every employee or engineer can act like an entitled baby and just quit and move to another company because they don’t get their 100% remote gig anymore. That only works now, if at all, because the job market is so tight due to all of the Fed money printing. If/when the Fed turns off the spigot, there will be a recession and the job market will not be tight anymore.[/quote]

For every company laying off there are a bunch of VC funded new companies. Nothing has changed really. Shopify even doesn’t have a major footprint in CA. Also a bad example, Shopify has been routinely hiring and firing well before their latest wall street numbers. It’s part of their “culture”…

Shopify actually IS one of the companies that count on remote workers to get around the high cost of employee Bay Area employees.Because they know they can’t compete with the FANG companies for talent with deeper pockets.

https://www.glassdoor.com/Reviews/Employee-Review-Shopify-RVW41454067.htm

Besides, given their large customer base, there’s plenty of contracting and consulting work and offshoot products built on top of shopify . It’s not just the company it’s the entire ecosystem of developers and talent to support all the large customer install base. Similar to what Salesforce.com did.[/quote]

So when Fed turns off the spigot, there will be an overall recession and tech will be hit very hard. Less jobs industry wide. San Diego and everywhere. Remote and office. At this point, employees will have a lot less leverage to “Demand” that they be allowed to work at home.[/quote]

It really depends. So many retail and entertainment companies are scrambling to reinvent themselves. That won’t slow down because for them it’s sink or swim for them. I’m in this space and our business has been growing during the pandemic. Other companies larger players have taken out low interest loans and using it to invest in their business. My company did something like that. As far as our business is concerned, we have remote workers because we need personnel closer to where our customers are than a central office. It’s easier for them to be onsite to do work that feeds into the product than having them travel back and forth between our Florida office. Hiring someone from Florida and having them spend 60% of their time as engineers on a plane is going to accelerate their resignation than hiring someone in LA next to our clients and allowing them to work remotely and be onsite…same could be said for our clients in the Midwest and Southern states. Also applies to our UK and Aussie customers…In fact now that work remote is more acceptable, there’s no need to restrict remote workers just to field engineers and support engineers and sales… It’s possible now to embed mobile engineers and platform engineers that work on the main product in these strategic locations more easily and as a result run a more integrated team from beginning to end…lots of benefits doing that too, because it reduces the traditional problem of product engineers being out of touch with real customer needs and issues…

Again, unless you are in management and have weighed some of these pros and cons, you won’t know why some of these decisions are made and you’re basing your opinions based on news articles you read that has very little to do with real business problems companies are solving.

[Anonymous]

Your reasoning for why some remote workers makes sense, and it has nothing to do with Covid. My point is the great majority of things went to extreme levels due to covid. One is remote work, the other main change is the Fed printed over 4 trillion dollars and doubled their balance sheet in 2 years.

With Covid winding down, there will be less Fed support and less folks working 100% from home, overall. You just keep giving niche examples. I never claimed that work at home will completely go away after Covid. But it will go down significantly. It has been publicly announced by several of the major Tech companies. Are you claiming they are lying? What insider knowledge do you have at Amazon and Google that I don’t have? Just because your company isn’t requiring people to work at the office doesn’t change that.

[sdrealtor]

[quote=deadzone][quote=sdrealtor][quote=deadzone]That has been true since 2009. However, with 7% inflation they cannot get away with dropping anymore helicopter money. I HOPE we see the Fed is actually allowing a crash/recession this time. However, ultimately no doubt they will make sure the banks are bailed out as usual.[/quote]

FIFY[/quote]

My hope has nothing to do with it. Fed can’t print money forever. Sooner or later there has to be a crash in order to have another rescue and re-inflate the next bubble. That’s how bubble economies work. TPTB (i.e. WS bankers) control when the crash happens. Whether this is THE crash or not is yet to be determined, but there will be a crash.[/quote]

Bookmarked

[Coronita]

[quote=deadzone]Your reasoning for why some remote workers makes sense, and it has nothing to do with Covid. My point is the great majority of things went to extreme levels due to covid. One is remote work, the other main change is the Fed printed over 4 trillion dollars and doubled their balance sheet in 2 years.

With Covid winding down, there will be less Fed support and less folks working 100% from home, overall. You just keep giving niche examples. I never claimed that work at home will completely go away after Covid. But it will go down significantly. It has been publicly announced by several of the major Tech companies. Are you claiming they are lying? What insider knowledge do you have at Amazon and Google that I don’t have? Just because your company isn’t requiring people to work at the office doesn’t change that.[/quote]

I didn’t say that covid was the cause of all remote workers to begin with. But now that covid has proven that remote workers are viable, businesses are seriously considering using remote workers because it’s been proven by many companies that it can be implemented successfully.

That’s the point. The cat is out of the bag. My company was already remote friendly before covid, and simply extended that as an option…But other companies that were hesitant before and saw the results, many are going to continue that.

Previously, most companies were hesitant even consider remote workers as an option because there was the concern about productivity, reliability, etc. Covid forced some of these companies to do this in order to keep running.

Many (not all companies) have figured out it works well for them and even when covid is no longer going to be an issue, they will continue with a remote friendly policy. Some companies will do old school and revert back in office only.. And some employees that are either scared or take offense to that will have the opportunity to switch employers, if their skills/abilities/etc are in demand.

Honestly, Google and Amazon prefer in office, but given how well they pay (better than MSFT), given their comp packages, I’d pour coffee for them if I could get in. Amazon is a little unique in that you don’t really get much before 3 years. If you can survive for 3 years though, that’s serious $$$$…In both cases though, they have enough satellite offices that an employee prospect just has to report to “a” field office. And I’m pretty sure for the right candidate best of the best, they will still make exceptions than the norm…In San Diego, that’s totally possible because like I said Google, Amazon, Apple all have a sizeable presence here now…

The other thing you are discounting is the issues with the supply chain and the now uncertainty of war….Onshoring is now making a comeback where at least in the hardware sector, companies are now compelling to onshore Fab and moving away from China and even Taiwan (or at least second source stuff domestically)… I mean, Taiwan will still be a leader with TSM, but they too are setting up shop here in the US because given the political instability right now in China, there’s a vested interest and a national security interest to bring some of this work back into the US. And given that we have inflation, perhaps that US wages now can justify having some of this manufacturing done in the US again. While companies like Intel never able to let US chip fab workers work remotely to begin with, they are expanding their footprint by now spinning up Fabs in the US for that reason. TSM and Samsung doing the same thing…

These manufacturing jobs won’t be available in CA, but elsewhere in the US, it’s good news.

Intel in Ohio:
https://www.jobsohio.com/intelinohio/?gclid=CjwKCAiA9tyQBhAIEiwA6tdCrL9OqumazgSlVdITKG5Lh5k_u_TZkB0ivQbf7ZNuAtmEhIc2G5GH9BoCYUcQAvD_BwE

TSM in Arizona:
https://www.extremetech.com/electronics/317329-tsmc-will-open-3-5-billion-semiconductor-fab-in-arizona

Samsung in Texas:
https://news.samsung.com/global/samsung-electronics-announces-new-advanced-semiconductor-fab-site-in-taylor-texas

America wins.

Long term.. Political instability is probably good for the US…US has the unique privilege of being worlds away from Europe and Asia, where the geo-political instability is happening. Just like in WW1 and WW2, continental US was shielded from main conflict…Seems to me, that US is a safe bet right now to expand to fix the supply chain issue, especially with inflation, that can justify higher wages to do it here.

The serious consideration is if a company spends a fortune to setup more FAB in Taiwan, what if China overruns it like Russia did with Ukraine? From a national security interest, it makes sense to invest in the US.

Work is coming home. And as long as there is hardware work, software work will follow and all the ancillary support technology that comes with it.

[sdrealtor]

Just some data to ponder over. I have been tracking 2 markets this year.

Mira Mesa has a population of about 85,000. There have been 33 houses placed on the market this year most of which are in same price range.

The NCC area I follow has about 125,000. THere have been 82 houses placed on the market of which about half are basically trophy properties above $2.5M so about 40 that would be purchased by typical working folks living in the area.

Long time owners are locked into mortgages with rates in the mid 2% range with a low prop 13 tax basis and many are sitting on gains above the capital gain exclusion level. THere is no major relief in supply coming anytime soon no matter what happens with the economy. My mortage plus taxes, insurance and hoa is less than the rent on a 1 BR Apartment around here now. I am not unique here.

It doesnt take everyone in a WFH job to buy the 5 to 10 regular homes that hit the market each week in either of these areas. Hope is a good thing, maybe the best of things but no good thing ever dies

[Coronita]

[quote=sdrealtor]Just some data to ponder over. I have been tracking 2 markets this year.

Mira Mesa has a population of about 85,000. There have been 33 houses placed on the market this year most of which are in same price range.

The NCC area I follow has about 125,000. THere have been 82 houses placed on the market of which about half are basically trophy properties above $2.5M so about 40 that would be purchased by typical working folks living in the area.

Long time owners are locked into mortgages with rates in the mid 2% range with a low prop 13 tax basis and many are sitting on gains above the capital gain exclusion level. THere is no major relief in supply coming anytime soon no matter what happens with the economy. My mortage plus taxes, insurance and hoa is less than the rent on a 1 BR Apartment around here now. I am not unique here.

It doesnt take everyone in a WFH job to buy the 5 to 10 regular homes that hit the market each week in either of these areas. Hope is a good thing, maybe the best of things but no good thing ever dies[/quote]

Longer term owners are pretty close to debt free or at least have rental income that covers said low interest 30 year loans.

[sdrealtor]

Yes that too. If I rented my place out it would be cash flow positive by almost $4K even with a loan

[Coronita]

Hey deadzone… Can you keep talking about how bad tech will do and how bad the stock market will continue to crash. We need a few more days of this kind of talk from you….

[Anonymous]

[quote=Coronita]Hey deadzone… Can you keep talking about how bad tech will do and how bad the stock market will continue to crash. We need a few more days of this kind of talk from you….[/quote]

Yea really, but more likely today was a relief rally aka dead cat bounce. The downward trend in the market is pretty strong. The Nasdaq still has a long way to retrace just to get to pre-covid numbers. As long as inflation keeps running hot, there likely will be no save from the Fed this time.

Bookmark

[XBoxBoy]

[quote=deadzone]
The Nasdaq still has a long way to retrace just to get to pre-covid numbers.[/quote]

Yeah, that’s true. QQQ’s are probably about $100 above their pre-covid level, so another 30%. SPYs about the same, maybe only 20%. And north country real estate would need to drop more than 30% to get to pre-covid levels I suspect.

Which leads me to wonder, are you predicting that things have another 30% to drop from here, or are you just saying, “Things will go down from here, but anyone who bought stocks or real estate and has held if for over two years will still be ahead.” Curious minds want to know.

[Author]

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