The Technology 202: The tech industry’s shift to remote work will forever change Silicon Valley
with Tonya Riley
Readers: The Technology 202 will not be publishing on Monday, May 25. We hope you have a relaxing and safe Memorial Day.
Living in Silicon Valley was a requirement for many people in top jobs at the technology companies. But that’s changing in the wake of the coronavirus.
After the pandemic-forced experiment with work from home proved successful, several tech companies are already planning not to return everyone to the office even after the social distancing restrictions ease. The biggest example so far: Facebook chief executive Mark Zuckerberg said yesterday that at least 50 percent of its 45,000-person workforce could start working remotely in the next five to 10 years.
“Certainly being able to recruit more broadly, especially across the U.S. and Canada to start, is going to open up a lot of new talent that previously wouldn’t have considered moving to a big city,” Zuckerberg said.
The company plans to “aggressively” start hiring more remote workers, my colleagues Rachel Lerman and Elizabeth Dwoskin write.
This could be the end of the Silicon Valley era: Tech workers soon be distributed throughout the country.
Tech companies have clustered in regions like the Bay Area and Seattle, where an entire ecosystem of venture capitalists, lawyers and engineers have congregated for decades since the rise of personal computing. Major tech companies invested in sprawling campuses, complete with perks like high-end coffee shops and tech shuttles, that defined the industry’s culture.
But in recent years, skyrocketing rents, rising paychecks, traffic congestion and local political backlash forced many companies to consider offices outside of coastal tech hubs – but the pandemic has shown that a mass shift to distributed work could happen faster than many previously predicted.
“More radical changes occur in bad times than in good times,” said Mark Muro, senior fellow and policy director at The Brookings Institution’s metropolitan policy program.
“As tragic a driver as covid is, it potentially could precipitate a more healthy geography of tech,” Muro added. Muro’s research has shown that coastal tech hubs are snapping up most new, high-tech jobs, and he’s previously proposed a massive investment in federal funding to help other cities keep up.
Facebook’s sudden announcement underscores how dramatically coronavirus has changed companies’ calculus. The company previously had a reputation for not being permissive to remote work, preferring to have employees clustered at its Menlo Park, Calif., headquarters. It stands in stark contrast to other companies’ approaches to expanding beyond coastal hubs before the pandemic, such as Amazon’s protracted HQ2 contest that ultimately resulted in the company expanding its presence in Northern Virginia.
Other tech companies have announced plans to allow workers to log in from anywhere. Twitter said last week that many employees would be able to work from home forever. Coinbase announced plans for a “remote-first” policy. And e-commerce service Shopify said most employees would continue to work remotely in 2021.
Tech companies have a financial incentive to embrace remote work.
Companies will be able to reduce spending on rent and even employee salaries if they’re living in areas with lower costs of living. Zuckerberg said yesterday that Facebook will begin in 2021 to lower paychecks to reflect cheaper costs of living in some instances, depending on location.
Danny Trinh, the head of design at the location-sharing app Zenly, said the cost savings could push more companies to embrace the remote work trend – comparing it to the shift to open office floor plans.
Remote-first work reminds me of the open office plan.
There are many noble reasons to justify it — but ultimately it’ll be adopted because it’s so employer friendly.
— Danny Trinh (@dtrinh) May 21, 2020
A greater distribution of workers could benefit the tech industry politically.
Many people in the country’s heartland have not had access to the high-paying jobs the largest tech companies have created in coastal cities such as San Francisco, Seattle and New York over the last decade. That divide has emerged as a politically divisive issue.
But politicians are cheering on the recent shift.
“This is a game changing proposal, and I applaud Facebook for taking this step. All Americans, regardless of where they live, should be able to participate in the digital revolution,” said Rep. Ro Khanna (D-Calif.). “It should not have taken covid for us to realize this, but I’m glad that tech companies like Facebook and Twitter will allow people to work remotely and not have to move for a good-paying job in tech.”
Khanna previously proposed a $900 billion plan to jump-start new tech hubs through federal research and development to counter President Trump’s “Make America Great Again” messaging.”
Other cities could come out as winners as tech looks beyond Silicon Valley.
Facebook plans to “immediately tap into” talent pools in cities including Portland, San Diego, Philadelphia and Pittsburgh, and the company later plans to expand hubs in Atlanta, Dallas and Denver.
That could lead to greater diversity at the company – both racially and ideologically. Muro says right now the tech companies’ concentration is holding them back from accessing the best talent.
“We’re likely not availing ourselves of all of the best talent and the best ideas and the best creativity,” he said.
Kim-Mai Cutler, a partner at the venture capital firm Initialized Capital, said it’s a boon to the budgets of second-tier cities:
Winners & losers from today’s WFH announcement:
🔺Bay Area renters
🔺Startups that want a presence in the Bay
🔺Parents/mid-career (esp. moms!) that want WFH
🔺POC that want to work from diverse cities
🔺Budgets of second-tier US cities
🔺Property owners in Santa Cruz, Napa, etc
— Kim-Mai Cutler (@kimmaicutler) May 21, 2020
Silicon Valley and other hubs will continue to be home to many high-tech workers.
Zuckerberg said the company would not be getting rid of its Menlo Park, Calif., office. And some experts predict that change may not happen so fast: Silicon Valley will continue to attract and be a home to many high-tech workers.
“I feel like Silicon Valley’s obituary has been written prematurely a lot of times,” Margaret O’Mara, a professor of history at University of Washington and the author of “The Code: Silicon Valley and the Remaking of America,” a chronicle of the tech industry, said in an interview with Rachel.
“I would not say Silicon Valley is over,” O’Mara added. “I think it will be different. It’s a bust like Silicon Valley has experienced before, but it’s different in that the big companies are still thriving and will get bigger.”
Rants and raves
Facebook’s big news sparked a lot of reaction:
Researcher Jane Manchun Wong:
I remember asking whether Facebook does remote working two years ago, they said nobody works remotely
To go from all-centralized to allowing remote working, this is bold and such a drastic change! https://t.co/1GsTAJEDMi
— Jane Manchun Wong (@wongmjane) May 21, 2020
Nitasha Tiku brought up this data point on how Facebook has treated parents in the past:
her story always stuck with me because tech parental benefits are far superior and yet hearing how moms have to navigate before leave, while they’re out, and once they get back…sounds like every other industry
— Nitasha Tiku (@nitashatiku) May 21, 2020
Our top tabs
The iPhone version of the Care19 app used by both states shares data with FourSquare, a location-data provider for marketers, according to an analysis by privacy software maker Jumbo shared with Geoffrey Fowler.
The findings appear to confirm some fears of privacy experts that a race to build out contact-tracing technology will result in serious privacy oversights.
“Should this have been vetted? Yes. We are following up on that as we speak,” said Vern Dosch, the state of North Dakota’s contact-tracing facilitator. “We know that people are very sensitive.” Health officials in South Dakota didn’t immediately reply to requests for comment.
IBM is making job cuts in at least five states that could affect thousands of employees.
The cuts also affected employees in North Carolina, Pennsylvania, California, Missouri and New York, where IBM is based, according to Bloomberg’s Olivia Carville. The company did not immediately specify how many position were eliminated, but it seemed to be in the thousands based on internal communications obtained by Olivia.
“This was far ranging — and historical employment ratings, age and seniority did not seem to matter,” said one North Carolina worker, who was laid off along with his entire team of 12. The person asked not to be identified on concern that speaking publicly may impact his severance package.
It’s not clear how many of IBM’s cuts were caused by the pandemic. The company’s revenue has been falling for years.
“IBM’s work in a highly competitive marketplace requires flexibility to constantly add high-value skills to our workforce. While we always consider the current environment, IBM’s workforce decisions are in the interest of the long-term health of our business,” company spokesman Ed Barbini said Thursday in a statement. “Recognizing the unique and difficult situation this business decision may create for some of our employees, IBM is offering subsidized medical coverage to all affected U.S. employees through June 2021.”
The virus has spurred a flurry of layoffs in the industry, especially at companies in travel and transportation such as Airbnb and Uber. Hewlett Packard Enterprise plans to cut some employees to save money, and Dell suspended several staff benefits.
Dozens of white-supremacist groups are still freely operating on Facebook despite stricter moderation policies, researchers found.
Just over half of the 221 white-supremacist organizations designated as hate groups by the Southern Poverty Law Center and Anti-Defamation League still had an active presence on Facebook, according to researchers at the Tech Transparency Project, a research initiative of the left-leaning corporate and government accountability nonprofit group Campaign for Accountability. Those organizations were associated with a total of 153 Facebook pages and four Facebook groups.
More than half the pages were automatically created by Facebook, which often happens after a user lists an organization without a page as their employer. Some of the pages in that category had thousands of likes.
Researchers also found active pages sharing similar posts or having similar names to four of the 14 pages that Facebook removed from its platform for violating its policies on white supremacy.
Facebook is reviewing the content raised in the report, including pages with the same titles as those Facebook previously removed from the platform, according to spokeswoman Sarah Pollack.
Facebook banned 250 white-supremacist organizations, Pollack said. But its criteria for hate-based groups differs from SPLC and ADL, she noted.
Civil rights advocates say Facebook shareholders need to address the findings at their annual meeting next week.
“We will see who is comfortable profiting off hate and who has the courage to stand up for the lives of those who are threatened by it,” Jessica J. González, co-founder of Change the Terms and co-CEO of Free Press, said in a statement.
The United States will lead global officials in a discussion on science and technology – virtually.
The White House Office of Science and Technology Policy:
Next week on May 28th, @WHOSTP Director Droegemeier and @USCTO Kratsios will lead the G7 Science and Technology Ministerial Meeting. We look forward to a robust discussion with our allies about the importance of S&T in responding to and recovering from COVID-19. #G7ScienceTech
— White House OSTP (@WHOSTP) May 21, 2020
Sens. Amy Klobuchar (D-Minn.) and Jerry Moran (R-Kan.) want the Federal Trade Commission do to more to protect senior citizens from coronavirus scams.
Their new bill directs the agency to report scams targeting seniors during the coronavirus pandemic to Congress as well as update its website to given better information to seniors and their caretakers about how to access law enforcement and protective agencies.
The Protecting Seniors from Emergency Scams Act is endorsed by AARP, the Elder Justice Coalition, American Society on Aging, and the National Adult Protective Services Association.
More Hill news:
Nextdoor is courting local police and public officials, raising alarm from civil rights advocates.
The community information-sharing app has flown out officials on all-expenses-paid trips, asked them to serve as ambassadors for the product for other police departments and asked them to sign non-disclosure agreements about their work, CityLab’s Sarah Holder reports.
It’s a familiar playbook for tech companies working with police departments, but advocates say it raises a troubling trend.
“Police are supposed to be impartial civic servants,” Matthew Guariglia, a policy analyst at the Electronic Frontier Foundation, a nonprofit group that advocates for digital civil liberties, told CityLab. “You want a police officer who has the best interests of their specific community at heart. You don’t want a police officer who’s brand loyal.”
More privacy news:
- Ranking Digital Rights will host an event “Getting to the Source of the 2020 Infodemic: It’s the Business Model,” on Wednesday at 11:30 a.m.
Before you log off
Happy anniversary to our favorite TikTok account! (Yes, we’re biased.)
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