Uber, Google, Ford Delay Office Return as Omicron’s Spread Threatens Business Districts

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Office-building owners and small businesses near such properties are bracing for another letdown in January, as the latest Covid-19 variant threatens to interfere with widespread company plans to return to the workplace.

Before the Omicron variant surfaced overseas last month, employers throughout the U.S. were preparing to call back employees to the office after the holidays. Now, a small but rising number of companies have modified or delayed plans as uncertainties swirl over the severity of the variant and its resistance to vaccines. That list includes

Lyft Inc.,

Ford Motor Co.

,

Uber Technologies Inc.

and

Alphabet Inc.’s

Google, though not all point to the new variant as the reason.

“The state of Covid-19 virus remains fluid,” said Ford in pushing the implementation of its return-to-office plan from January to March.

The pullback is in some ways reminiscent of September, when the Delta variant forced numerous companies to cancel their return-to-office plans, upending hopes that there would be a major back-to-office surge following Labor Day.

San Francisco-based Uber Technologies is among the firms that have changed their return-to-office plans in recent weeks.



Photo:

Justin Sullivan/Getty Images

A reduction in the number of employees returning to work next month would be painful for office-building landlords who have been struggling with high vacancy and uncertainty over the long-term impact of the pandemic. Some analysts suggested that another delayed return to the office would cause more employers to consider remote work longer term.

“The big risk would be if these companies now take a bigger step towards a more work-from-home world,” said

Daniel Ismail,

senior analyst at real-estate-analytics firm Green Street.

Sales at restaurants, bars and other small businesses near office buildings have suffered for nearly two years, causing these operators to scramble to make rent payments and keep their operations alive. Some are already reconciling themselves to a poor start to the new year.

“January gets pushed back to February. February will get pushed back to March,” said

Rick Passarelli,

owner of a Bobby Van’s steakhouse in Midtown Manhattan. “It keeps getting pushed back.”

Early data already suggest that the Omicron variant may be better at evading vaccine-generated antibodies, and a lot of that has to do with what’s happening at a molecular level. WSJ’s Daniela Hernandez explains.

While less than half of the office workers have returned in major urban markets, landlords take some solace knowing that the number continues to edge higher. An average of 41% of the workforce was back in the 10 major cities monitored by Kastle Systems in the week after Thanksgiving, a record level since the pandemic hit. Kastle is a nationwide security company that monitors access-card swipes in 10 large cities.

And landlords remain hopeful that any retreat from the office won’t be as severe as it was before Labor Day. For one, more Americans are vaccinated now. Currently about 82% of the U.S. population ages 12 and up has had at least one dose, and the rate is much higher in cities such as New York and San Francisco, according to the Centers for Disease Control and Prevention. That compares to only around 62% of the eligible population as the country headed into the Labor Day weekend, the CDC said.

Some businesses also are taking cues from President Biden, who has said no new lockdowns are necessary due to the Omicron variant. He has limited new restrictions mostly to travel rules. Many public events, from football games to Broadway shows, are proceeding.

Broadway shows and other events are proceeding as the Omicron variant spreads; theatergoers at ‘The Lion King’ in September.



Photo:

Charles Sykes/Invision/Associated Press

Wells Fargo & Co. is among the firms pledging to return as planned next month. The bank said last month that it “will continue to follow the science,” and it is on track to open its San Francisco headquarters and other locations.

Businesses also recognize that lurching from one workplace strategy to another before the health data support such moves creates uncertainty and hurts credibility, said

Kathryn Wylde,

chief executive of the Partnership for New York City, a business group.

“It’s been back and forth so many times,” Ms. Wylde said. “Every one of those reversals increases the lack of trust that anybody knows the right thing to do.”

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That concern isn’t stopping some companies from delaying or tinkering with their return schedules.

Hartford Financial Services Group Inc.

said it put off plans to bring its senior leadership team to the downtown Hartford, Conn., office during the first week in December. The company said it is still moving forward with a Jan. 18 return-to-office for employees.

Meta Platforms Inc.,

formerly known as Facebook Inc., said last week it would fully reopen its U.S. offices at the end of January. But it also said it was implementing a new office deferral program that gives workers the option to delay their scheduled return as late as June.

Other companies have indicated they might delay plans based on new findings related to the Omicron variant.

Pfizer Inc.

and

BioNTech

SE said last week that a third dose of their Covid-19 vaccine neutralized the Omicron variant in lab tests but the two-dose regimen was less effective at blocking the virus.

Write to Peter Grant at [email protected]

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