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Hidden Layoffs: The Sneaky Reason Companies Are Mandating Return to Office

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  • Return to work mandates are increasing, with companies looking to boost productivity via having employees work in the office.
  • However, many now view these mandates as ways to increase attrition or invite existing employees to leave.
  • In doing so, companies can reshape their headcount and employee structure without incurring costs associated with layoffs.
hidden layoffs - Hidden Layoffs: The Sneaky Reason Companies Are Mandating Return to Office

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As life returns to normal following the Covid-19 pandemic, many things in our day-to-day lives are changing. It’s common to see headlines of various companies calling employees back to the office, forcing certain employees who may have moved further away from the office (sometimes even out of state) to save on housing costs during the pandemic into a conundrum. Do employees put their home on the market, potentially take a big loss on the sale, and lock in a much higher mortgage rate? Or do those employees simply say “I quit,” and look for a remote position elsewhere?

That’s a real-life situation for many of today’s workers. And despite the economy becoming increasingly technologically enhanced, the reality is that many companies are moving from a fully remote business model to a hybrid, or entirely in-person, one.

Let’s dive into whether certain companies may be viewing return-to-office (RTO) mandates as a chance to strategically reshape their workforce. Though they wouldn’t openly admit it due to legal concerns. 

Reducing Overhead Costs

Companies may consider implementing return-to-office mandates as a strategy to discreetly reduce their workforce due to economic challenges, concerns about recessions, and shifts in consumer-spending habits. Costly office spaces coupled with a remote and digital workforce have prompted some businesses to seek ways to cut expenses, according to Meghan M. Biro, an expert in talent management and workplace dynamics.

With the implementation of return-to-office mandates, some employees may be compelled to move or face extended commutes, which can create financial and personal challenges. Faced with these difficulties, some individuals might opt to resign rather than cope with these burdens, indirectly leading to job cuts due to the RTO mandate.

Amazon (NASDAQ:AMZN), for instance, strengthened its RTO policy by urging select employees to relocate to a central hub. This move led some to leave instead of uprooting their lives or breaking leases. RTO mandates also enable companies to assess individual performance under new circumstances.

Making Work Unappealing

Over 50% of companies are pushing for in-office work, while 80% of employees prefer remote or hybrid setups, says a June report by The Conference Board. This disconnect may cause dissatisfaction and reduced retention, with one-third of mandatory office workers considering leaving their companies.

Among 1,300 U.S. office workers surveyed, 28% worked fully remotely, 50% had hybrid schedules with remote work, and only 15% were in the office full-time. Over 50% reported their organizations mandated or strongly encouraged in-office work, with 29% mandating it and 25% strongly encouraging it.

Mandatory office attendance could negatively impact employee retention, with 28% of workers in such companies indicating decreased intent to stay. In the last six months, layoffs were reported by 33% of fully remote employees, 25% of hybrid workers and 13% of fully on-site workers.

Fully remote workers reported higher productivity (35% increase in the last six months) compared to hybrid (22%) and on-site workers (20%). However, 19% of on-site workers saw decreased productivity. Meanwhile, concerns about team connections were expressed by 45% of remote and 37% of hybrid workers, as only 47% of organizations offer in-person team-building events.

What Now

Shelline Bennett, a labor and employment lawyer at Liebert Cassidy Whitmore, advises organizations to implement workplace return mandates straightforwardly. Afterward, they should follow legal and best business practices for layoffs to avoid any potential legal issues or misperceptions.

Employers should avoid using Return-to-Office mandates as a way to indirectly initiate layoffs, as this could lead to legal consequences. Such actions might violate the federal Worker Adjustment and Retraining (WARN) Act and state laws, like California’s Cal WARN Act, which require advance notice to employees. Additionally, employers should be cautious about layoffs disproportionately affecting certain protected classes, potentially leading to discrimination claims, especially for employees aged 40 and above.

That said, employees should stay informed about their rights. They should also communicate with their employers if they feel any workplace policies, including return-to-office mandates, are being used to unfairly discriminate or push them out of a job. Employers should be open to hearing employee concerns and finding solutions that work for both parties.

On the date of publication, Chris MacDonald has a LONG position in AMZN. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.


Article printed from InvestorPlace Media, https://investorplace.com/2023/10/hidden-layoffs-the-sneaky-reason-companies-are-mandating-return-to-office/.

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