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Goldman Sachs CEO Says Remote Work Is 'Not a New Normal'


Mar 14, 2021 by Maurie Backman
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When the coronavirus outbreak first erupted, a lot of people assumed they'd be working from home for a couple of weeks or, worst-case scenario, a couple of months until the situation improved. Fast-forward a full year, and many employees are still doing their jobs from home.

Remote work has definitely had mixed results. On the one hand, it's given many employees a lot more flexibility and has eased the burden of childcare and commuting. On the other, a lot of people miss office life, and while some workers have thrived in a remote environment, others have seen their productivity take a hit.

Employers may have mixed feelings about remote work, too. While it has the potential to save them lots of money by dumping office space, it could also limit collaboration and output.

Still, a number of companies are making plans to let employees continue to work remotely, either on a full-time or partial basis. But those companies may be the exception and not the norm.

Is remote work really the new normal?

If you ask Goldman Sachs (NYSE: GS) CEO David Solomon if remote work is here to stay, his answer will be an immediate "no." More specifically: At a Credit Suisse Group AG (NYSE: CS) conference, Solomon said, “This is not ideal for us, and it’s not a new normal." And while he can obviously only speak to his own company's intentions, chances are Goldman Sachs won't be the only major employer to bring workers back to the office once it's safe to do so.

Right now, the bulk of the U.S. population has yet to be vaccinated against COVID-19, and the initial rollout has been slower than many would've liked. But President Biden recently made an encouraging declaration -- that any adult who wants a vaccine will be able to get one by the end of May. If that timeline holds, it means a large number of employees could be returning to the office by summertime. This is especially feasible now that Johnson & Johnson's (NYSE: JNJ) single-dose vaccine has hit the market, as recipients of it are said to have full protection two weeks after getting jabbed.

If a rapid vaccine rollout really does happen and more employers take a stance similar to that of Goldman Sachs, there could be a major revival in the works this year for office buildings. That would, in turn, be great news for real estate investment trusts (REITs) with portfolios consisting largely of office buildings. In the course of the pandemic, many such REITs have seen their values plummet, but if more companies get on board with a return to in-person work, things could change pretty quickly.

The Millionacres bottom line

Of course, there's a good chance that once the pandemic is over, a lot of companies that once required full-time work will instead adopt more flexible policies. But will companies completely unload office space left and right? Not necessarily.

Furthermore, a lot of individual workers are pushing for a return to the office after a year of isolation and restlessness. And while some may be forced to go back kicking and screaming, at the end of the day, office REIT investors can rest assured that remote work isn't necessarily destined to become the default setting for companies across the U.S.

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Maurie Backman owns shares of Johnson & Johnson. The Motley Fool recommends Johnson & Johnson. The Motley Fool has a disclosure policy.