Amazon’s RTO Mandate Delayed Amid Space Constraints

Companies ditched offices left and right in the years since the pandemic, realizing they no longer need as much space. Tech giant Amazon is running into the opposite issue.

The company is delaying its return-to-office mandate for workers in some cities across the country, Bloomberg reported. Workers in at least seven cities, including Austin and Dallas, are having their office return dates pushed back by months.

A spokesperson for the company said the vast majority of Amazon’s 350,000-strong corporate workforce will have desks at the start of the year. The spokesperson added the delays have more to do with reconfiguring properties for more workers than actually needing more office space.

Amazon’s RTO policy roiled part of its workforce, who pointed to other tech companies embracing more flexible arrangements. Amazon CEO Andy Jassy announced a full-time return for office workers in September, saying it was necessary to improve company culture.

Amazon has required most employees to go into the office three times a week. Even that has been problematic for workers, who complain of sharing desks and lacking private spaces or conference rooms for confidential meetings.

The company has been on the hunt for more office space across the country. This fall, Amazon entered into negotiations to lease HSBC’s office space at 452 Fifth Avenue when the bank relocates to Tishman Speyer’s Spiral next year. The 350,000-square-foot space is near Amazon’s office space at the former Lord & Taylor building at 424-434 Fifth Avenue, which houses 2,000 employees. The company bought the property for over $1.1 billion in 2020.

Mere months ago, Amazon was seemingly looking to curtail its office holdings and reduce vacancies. In March, a report from Business Insider claimed that Amazon expected to save approximately $1.3 billion by cutting down on vacancies, which it would do by not renewing leases, terminating others early and ending the use of some floors.

At the time, a spokesperson for Amazon said the company regularly reviews its real estate portfolio.

— Holden Walter-Warner