Dec. 3, 2021, 10:51 a.m. EST

Google just paused January 2022 office return plans amid omicron — will other companies follow?

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By Andrew Keshner

After COVID-19 sent millions of workers to their homes in 2020 and the delta variant this summer snarled some return-to-office plans, the omicron variant’s emergence may prompt company executives to go back to the drawing board yet again on when their workers will physically return.

An early signal of omicron’s possible impact happened Thursday, when Google /zigman2/quotes/202490156/composite GOOGL -1.34% told employees it was hitting the pause button on a Jan. 10 return date. The tech giant is going to wait until 2022 to figure out how and where to put a hybrid plan into place, a Google spokesperson told MarketWatch. CNBC first reported Google’s decision.

A lot remains unknown about the latest variant of the virus that causes COVID-19, which the World Health Organization flagged as a “ variant of concern ,” including how much existing vaccines can counter this version of the virus and how the variant will impact the economy. Omicron variant cases had started to sprout in America by the end of the week, including multiple cases in New York.

At the very least, the variant is a “hiccup” in the country’s return to office plans, according to Wells Fargo analysts. “At a minimum, Omicron slows down return-to-office,” they wrote in a Nov. 29 investor note.

Wells Fargo /zigman2/quotes/203790192/composite WFC -1.03% itself is one of several high-profile companies that was planning on a January 2022 return to the office. The bank was initially aiming for a September 2021 return, but the delta variant upended those plans.

There’s no change in the bank’s return to office plans right now, a company spokeswoman said Monday, “but we will continue to follow the science as we have from the start. Our No. 1 priority is the safety of our employees and our customers.”

Now the question is whether omicron is a mere hiccup for Wells Fargo and other companies, or something deeper and more troubling.

For companies with staff back already, “they are not saying ‘Whoa, whoa, whoa, now go back home,’” said Elise Freedman, Korn Ferry’s workforce transformation practice leader, who works with companies on their return-to-office plans. First steps might include setting stricter on office rules like masks in public spaces or maintaining low numbers of people in conference rooms, Freedman said in an interview on Monday.

President Joe Biden said Monday he didn’t have his eye on “shutdowns or lockdowns,” giving a boost to U.S. stock benchmarks in Monday’s trading session. On Thursday, he unveiled an array of tactics to help the country get through another pandemic winter . It includes the expansion of at-home testing and tighter testing requirements for international travelers.

For companies that are still working remotely, Freedman was already hearing increasing caution before the omicron strain emerged. COVID-19 cases have been increasing and flu season arrived, she noted. “A number of clients say we are just going to play it slow,” Freedman said.

If vaccines, medical treatments and social distancing measures can keep omicron in check, Mark Ein, chairman of Kastle Systems, said companies could delay their full returns the office, but he sees the omicron variant’s emergence “more as a hiccup or a road bump than it is any fundamental shift.” Ein views the return-to-office issue from the security software and services his company provides.

“I think people are just so eager to get back to the office that they are not going to let things that aren’t fundamentally different or fundamentally serious get in the way of getting their teams back together,” he said.

Last week, the company’s weekly office occupancy gauge showed buildings where Kastle provides access security were 32.5% occupied on average. That’s down from a 38.8% national average one week earlier, but Ein attributed that to the shortened Thanksgiving work week. He expects the occupancy numbers to rebound this week.

Ahead of omicron, other numbers indicated more people were physically back in the office and fewer were home.

Friday’s jobs report on November’s employment situation showed 11.3% of workers saying they had teleworked or worked from home at least once in the past month due to the pandemic. That’s down slightly from 11.6% in October and a significant decrease from 23.2% in January, the Bureau of Labor Statistics numbers show.

The omicron variant comes as 2022 office return dates loom for several companies.

Meta /zigman2/quotes/205064656/composite FB -0.95% , then Facebook, announced in August it was pushing its office return date to January. Capital One /zigman2/quotes/204480509/composite COF -0.88% was aiming for a November return, but announced last month it was putting off the event until an unannounced point in 2022.

“We’re currently monitoring the situation closely and our return to office plans for January 2022 remain,” a Meta spokesman said Nov 29.

“Capital One will remain primarily a remote work company going into 2022. We have not yet announced a return date amid continued uncertainty over the direction of this pandemic,” a spokeswoman said, noting that staff would get a 30-day advance notice before offices fully reopened.

“In the meantime, we are providing voluntary options for associates to work from our offices and attend small, informal gatherings, if they choose,” she noted. The company has previously said it will ultimately aim to have a hybrid work model for staff.

Corporate employees at DoorDash were slated to work from home through the end of 2021. Come January, the company said it would “reintroduce in-person work for these employees through a hybrid approach, encouraging live collaboration with a balance of remote flexibility.”

In light of omicron, the company was taking a wait-and-see approach, Chris Cherry, DoorDash’s director of global safety and security, said in a Nov. 29 statement.

“This is a dynamic situation that we’ll continue to evaluate, making educated decisions based on the most up to date guidance and information we receive,” Cherry said.

If the omicron variant is more contagious, more virulent or resistant to current vaccines, Bradford Bell, a Cornell University professor focused on strategic human resources, said he’d expect companies to push back their return to office timelines. He’d also expect them to tighten access and rules for the staff that is coming back already.

But the omicron variant is also coming amid a labor shortage when many companies are on the hunt to find and keep staff. So even if physical office returns get dialed down, Bell doesn’t think hiring plans will also.

The economy added 210,000 in November — a disappointing miss on forecasts — but the labor force participation rate increased in a sign more people are returning for work.

If any disruptions from omicron are more long-term, Bell said it’s possible companies will reduce hiring to brace for smaller business. “But, given the challenges companies have been facing in their efforts to staff back up, I think most will be very hesitant to lose any momentum they have been able to start building back on the hiring front,” he said.

This story was updated on Dec. 3, 2021.

/zigman2/quotes/202490156/composite
US : U.S.: Nasdaq
$ 2,666.15
-36.18 -1.34%
Volume: 1.50M
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25.68
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N/A
Market Cap
$1797.11 billion
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$1.77M
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/zigman2/quotes/203790192/composite
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$ 55.00
-0.57 -1.03%
Volume: 26.97M
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1.45%
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$215.93 billion
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$306,881
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/zigman2/quotes/205064656/composite
US : U.S.: Nasdaq
$ 316.56
-3.03 -0.95%
Volume: 16.93M
Jan. 20, 2022 4:00p
P/E Ratio
22.60
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N/A
Market Cap
$889.02 billion
Rev. per Employee
$1.92M
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/zigman2/quotes/204480509/composite
US : U.S.: NYSE
$ 150.27
-1.34 -0.88%
Volume: 1.96M
Jan. 20, 2022 4:00p
P/E Ratio
5.61
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1.60%
Market Cap
$64.53 billion
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$605,271
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