May you explain why ruthlessly profit driven CEOs of megacorporations don't care about the commercial value of the real estate they own?

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dh2022 4 days ago | parent | next [-]

Because who are the profit driven CEOs (are there any other CEOs?) sell their buildings to? The value of their building affects the profit via the depreciation expense. Which is to say the more buildings you have for RTO the bigger the expense-and thus the lower the profit for the profit maximizing CEOs.

From a profit only perspective RTO makes sense only if the cities gave businesses tax breaks tied to business occupancy (the city’s math is they will get some of these taxes back when employees go and spend money in the city). And maybe cities are threatening to stop these taxes back until RTO.

In Microsoft’s case though people only spend some money at the cafeteria-because there is nothing else to spend money on their campus. How big could that tax break could be?

This RTO request from Microsoft does not make much sense.

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tracker1 4 days ago | parent | next [-]

You should also consider property taxes from where the employees live. In MS's case, plenty of the employees own or rent in the same town, or nearby. At least as a calculation/consideration of tax breaks. I can say that if it weren't for Intel, Wells Fargo and others deciding to build/employ in Chandler, AZ the town wouldn't be half that size in terms of residential population. I'm sure the same is true even for bigger cities relative to business size.

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dh2022 4 days ago | parent [-]

How would this be an incentive for Microsoft to require RTO though? Even if Microsoft would receive tax breaks from the city because employees own property and pay property taxes - the city would get the same amount of property taxes if employees work from home. Microsoft would receive the same tax breaks.

AFAIK Microsoft mandated RTO only for employees that live within 50 miles of an office. So far Microsoft does not require employees to move to a city - and bolster the property taxes the city collects.

I still do not understand the logic behind RTO.

	▲	tracker1 4 days ago \| parent [-]
		I was stating that's a consideration of why a City/State offers the incentives... I can't speak to MS in this case in particular. It's far more likely a soft layoff strategy. I'd also say, I've seen far more people just sandbag and slack off in WFH than in an actual office.

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pharrington 4 days ago | parent | prev [-]

>How big could that tax break could be?

Many are asking this!

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ThrowawayB7 4 days ago | parent | prev [-]

In the case of Microsoft, their main campus in a thriving suburb of the Seattle Eastside would be prime real estate even if they disappeared tomorrow. They have absolutely zero reason to worry about the value of their real estate regardless of occupancy.