Many businesses may follow Amazon in stretching out work-from-home policies, crimping downtown recovery – Seattle Times - Freelance Rack

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Saturday, May 2, 2020

Many businesses may follow Amazon in stretching out work-from-home policies, crimping downtown recovery – Seattle Times

Amazon’s decision to let engineers and other office staff keep working from home through at least Oct. 2 was another blow for struggling merchants in downtown Seattle and Bellevue, which have been virtual ghost towns since the coronavirus crisis emptied the cubicle farms in March.

The decision, which the Seattle-based online retailer shared with employees Thursday, also could signal a broader trend toward extending work-from-home practices. Other white-collar employers are realizing that returning to the workplaces is likely to require extensive precautions — and pose heightened health risks — even after business gets the all-clear from Gov. Jay Inslee.

“There’s going to be a lot of employers that going to say, ‘well it has worked to some degree for a month and a half – let’s keep going,’” said Jon Scholes, president of the Downtown Seattle Association, which reckons that nearly half of downtown Seattle’s 330,000 jobs are currently being done remotely.

On Friday, Inslee extended the stay-at-home order through May 31 while setting out a timeline that would possibly allow some businesses, including “office-based businesses,” to open several days earlier.

But the governor also “strongly encouraged” continued telecommuting, and Amazon isn’t the only company to heed that call.

Zillow announced last week it will continue to allow employees to work from home through the end of year. Microsoft has said employees in King County could continue to work from home until further notice. At the Seattle-based Gates Foundation a spokesperson said the work-from-home policy is in place “at least June 30.”

Business and government insiders say other companies and organizations are contemplating similarly extended time frames as they consider the new realities of the workplace in the COVID-19 era.

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Those realities were made clear in the new policy at Amazon, which has some 50,000 workers in the Seattle area,many of whom have been working from home since March. Although Amazon made clear that workers can return to their offices once Inslee gives the ok, the company also said it will take extensive precautions, including physical distancing, deep cleaning, temperature checks and the availability of hand sanitizer and masks–several hundred thousand a week, by one estimate–to ensure employees feel safe.

Faced with such requirements, and knowing that some employees may still feel reluctant to return to an office environment, many office-based employers may also opt for a slower return.

“We expect an extended return to downtown,” said Jesse Canedo, chief economic development officer for the City of Bellevue, which estimates where roughly half of the city’s 125,000 workers are able to work from home. The city’s employers are “very cognizant of their employees’ feelings about returning to an office environment,” he said.

That conservative approach could add to tensions between big employers and merchants in urban cores that have come to depend on business from office workers. Downtown Seattle, which took early hits to its tourism and convention sectors, has also seen a huge loss of the spending that once came from the hundreds of thousands in the “Monday through Friday workforce,” Scholes said.

After weeks of little or no business, many downtown restaurants and shops were desperately hoping to see customers return in time for the all-important summer season, when many smaller businesses earn the income to carry them through the winter.

The governor’s stay-at-home order turned downtown Seattle into a “ghost town,” said Rachel Marshall, owner of Rachel’s Ginger Beer, who opened a location near the Amazon Spheres late last year. Without a strong summer season, Marshall said, low-margin businesses like restaurants can’t survive. “It just doesn’t pencil,” she added.

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In Bellevue, where restaurants and other businesses also have been “devastated,” business leaders are bracing for more impacts as employers roll out their own transition plans, said Joe Fain, President of the Bellevue Chamber of Commerce. Although Amazon itself is not yet much of an Eastside presence, Fain said, “there are a lot of companies that are going to be making a similar decision to Amazon’s.”

Big employers aren’t unaware of the impacts of their work-from-home policies. Amazon, for example, has given $10 million in grants and rent relief to more than 800 small businesses, including many around its now largely empty campuses in South Lake Union and Bellevue, according to figures released in its quarterly earnings announcement Thursday.

But the company won’t say whether that support will be extended for the duration of its work-from-home policy, which it told employees would extend “at least until Oct. 2.”

More broadly, even if Amazon and other big employers agreed to help smaller businesses get through this phase of the coronavirus crisis, there are serious questions about the longer-term relationship between big employers like Amazon and the downtowns that have been so integral to their corporate successes.

As disruptive as the coronavirus crisis has been, many companies have not merely adapted to the work-from-home mode, but in some cases have found it preferable to a model that requires tens of thousand of employees to commute each day.

“By and large, I believe, we’ve been able to make progress even with our work-from-home situation with office staff,” Amazon chief financial officer Brian Olsavsky told reporters during a conference call Thursday.

Likewise at Redfin, a Seattle-based online real estate brokerage, working from home “has worked out better than we could’ve hoped,” said CEO Glenn Kelman. “Even when the pandemic is well behind us, we’ll be more flexible about letting people with long commutes or in entirely new, more affordable cities do their jobs remotely.”

Some downtown business owners worry that big employers may not come back at all–or, at least, may come back in a much smaller way–as the work-from-home experience undermines their attachment to an expensive downtown location.

“If I was in their shoes and I could start hiring good talent from Oklahoma and having them work remotely and paying them half as much as I have to pay them to move to Seattle, I would consider that,” said Ethan Stowell, who runs several downtown restaurants and plans to open one near Amazon’s headquarters. “Is that the new trend?”

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That may be an extreme scenario. But even under more optimistic scenarios, downtowns may need to prepare for a world with fewer office workers dropping fewer dollars at local merchants–and find ways to attract other customers.

“I do think the ‘five days in the office’ workweek is officially dead for the majority of workers,” said Fain.

Former Gov. Christine Gregoire, who runs the business group Seattle Challenge and has helped coordinate a joint business-government response to the crisis, sees the recent moves by Amazon and other large employers as wake-up calls for those who still expect a “V shaped recovery” and a return to the way things were.

“We’re phasing into a new normal that will last until we have mass distribution of a vaccine that works,” said Gregoire, whose experience during the Great Recession taught her that economies never return to their precrisis forms. “It’s not realistic to assume that we’re just going to come back with a boom and be economically where we were pre-COVID anytime soon.”

Seattle Times business reporter Katherine Khashimova Long contributed to this story.

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