Microsoft Offers Permanent Work-from-Home Option with Pay-Cuts if Employees Move to Cheaper Cities or Countries

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by Wolf Richter, Wolf Street:

“Hybrid workplace,” it calls it. The trend for many companies with office workers and enough tech savvy to pull it off. A nightmare for landlords.

Microsoft became the latest company to officially build work-from-home as a permanent feature and benefit into its model – a “hybrid workplace,” as it calls it, which seems to be where this is heading for companies with office employees and enough tech savvy to pull it off. But that excludes a lot of companies too. For example, the small company my wife works for doesn’t have the tech savvy to do this, and being in the international trade business, still uses a lot of paper documents that are signed and FedExed back and forth.

But big companies have been prodded by the Pandemic into rethinking how they do business, how offices should operate most efficiently, how money could be saved not only on office space but also on payroll – and yes, Microsoft got into that too, because cost cutting is always a huge priority. So forget the Seattle salary with housing costs in Tulsa.

Microsoft outlined its plans and guidance for a “hybrid workplace” in an internal memo to employees that Verge has obtained.

“The COVID-19 pandemic has challenged all of us to think, live, and work in new ways,” wrote Microsoft Chief People Officer Kathleen Hogan in the memo. “We will offer as much flexibility as possible to support individual workstyles, while balancing business needs, and ensuring we live our culture.”

Specifically:

Employees will be allowed to work from home freely, without manager’s approval, for less than 50% of their work week. The rest of the time, they go to the office. Flexible hours will be available without approval. But switching to part-time hours will require manager’s approval.

Employees can permanently work remotely with the approval from their managers.

Employees who have been approved to work from home permanently can, with approval from their managers, move across the country, or even internationally. In other words, they can work from anywhere.

But his may entail a pay-cut: Employees who move from an expensive area, such as Seattle, to a low-cost area in the US or a foreign country, will see their compensation and benefits change based on Microsoft’s geopay scale.

Microsoft will cover the office expenses of people permanently working from home. But it will not cover the moving expenses of employees who choose to move to a remote location.

Employees who then work permanently from home lose their assigned work space at the office, but they can still come in and use the “Touchdown Space” at the office. Microsoft implemented offices with Touchdown Space over a dozen years ago to make remote working easier, so this concept isn’t new at the company.

But some roles may not be able to transition into less than 50% work-from-home mode, and they will need to continue to show up at their work place, according to the memo cited by Verge, including roles that require access to hardware labs, data centers, and in-person training.

Among Big Tech, Apple CEO Tim Cook dove into the topic of work-from-home (WFH) during an interview in September, where he acknowledged that Apple too, even after building one of the fanciest and most expensive office complexes designed for in-person collaboration, is seeing permanent changes where and how work gets done.

“I don’t believe that we’ll return to the way we were, because we found that there are some things that actually work really well virtually,” Cook said. But he also pointed out that the “vast majority” of Apple employees “can’t wait until we can be back in the office.”

Facebook, Twitter, Okta, Box, crypto-exchange Coinbase, job-search firm Indeed, and many other companies have already spelled out their expectations that WFH will become a permanent feature, benefit, or option for many of their employees. Twitter, no longer needing as huge of an office, has already put 100,000 square feet of space at its headquarters in San Francisco on the sublease market.

Google has remained mum about the permanent aspects of WFH. JPMorgan Chase CEO Jamie Dimon wants to get employees back to the office – “Going back to work is a good thing,” he said – but acknowledged that there “will be permanent changes from this.”

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