Billionaire real estate tycoon Stephen Ross suggested Friday that a looming US economic recession could put an end to the work-from-home craze that swept the country during the pandemic.
Ross, whose firm Related Cos. owns office space in New York and across the US, suggested the possibility of layoffs could lead employees to drop their resistance.
“Employers have been somewhat hesitant because they didn’t want to lose their employees, but I think as you go into a recession and people fear that they might not have a job, that will bring people back to the office,” Ross told Bloomberg.
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Major banks and other companies have had mixed results in luring workers back to their desks following a pandemic-era shift toward remote work and hybrid office schedules. Employers have emphasized efforts to keep their workers happy in an extremely tight labor market — with the national unemployment rate currently hovering at just 3.6%.
But the labor market is expected to cool in the months ahead as the Federal Reserve hikes interest rates to tame decades-high inflation. The Fed’s plan has sparked widespread market volatility and prompted some companies to begin belt-tightening measures aimed at preserving their balance sheets during a period of tighter monetary policy.
“The employees will recognize as we go into a recession, or as things get a little tighter, that you have to do what it takes to keep your job and to earn a living,” Ross said.
Ross’ Related Cos. developed the Hudson Yards site in New York City. The 82-year-old also owns the NFL’s Miami Dolphins and has an estimated fortune of $8.2 billion, according to Forbes.
Employers in some sectors, including cryptocurrency and real estate firms, have already begun making layoffs. A growing number of experts, from JPMorgan Chase boss Jamie Dimon to ex-Treasury Secretary Larry Summers, are forecasting difficult economic conditions in the near future.
So far, workers have resisted efforts by bank executives and other employers to return to the office.
In New York, just 41% of office workers were back to working on site as of June 8, according to data from Kastle Systems. Concerns related to crime on subways and the COVID-19 pandemic are among the top issues keeping employees at home.
Efforts to implement a strict return-to-office policy at banks such as Goldman Sachs and JPMorgan Chase have met with resistance from employees who have grumbled about the requirements.
Ross told Bloomberg that in-person collaboration remains essential for businesses.
“Every executive recognizes that people need to work together,” Ross said. “You have to train your workforce and educate them and you work as a team. You don’t work as individuals.”