Remote working: Is Big Tech going off work from home?

On Wednesday last week, Google’s Fiona Cicconi wrote to company employees.

She announced that Google was bringing forward its timetable of moving people back into the office.

As of 1 September, she said, employees wishing to work from home for more than 14 days would have to apply to do so

Employees were also expected to “live within commuting distance” of offices. No cocktails by the beach with a laptop, then.

The intention was very clear. Sure, you can do more flexible working than you did before – but most people will still have to come into the office. 

That thinking seemed to fly in the face of much of what we heard from Silicon Valley executives last year, when they championed the virtues of remote working. 

For example, Twitter’s Jack Dorsey made headlines across the world last May, when he said “Twitter employees can now work from home forever”. 

It was speculated that after Covid, the “new normal” for Silicon Valley might be a workforce heavily geared around remote working, with tech companies needing only minimal staff on-site. 

It’s increasingly looking like that’s not going to happen. 

And if you really look at the statements made by tech bosses, some of the nuances were skirted over by the press.

For example, when Mr Dorsey said employees could work at home “forever”, he added: “If our employees are in a role and situation that enables them to work from home.” 

That was a pretty important “if”. 

And in fact, Twitter has clarified that it expects a majority of its staff to spend some time working from home and some time working in the office. 

Pretty much every Silicon Valley tech firm has said that it is now committed to “flexible” or “hybrid” working. 

The problem is those terms can mean almost anything. 

Is that Fridays off? Or a completely different working relationship with a brick-and-mortar office? 

A man carries a laptop bag and a medical mask to work

Microsoft envisages “‘working from home part of the time (less than 50%) as standard for most roles” in the future. 

There is a lot of room for manoeuvre in the words “less than 50%”. 

Amazon also issued a statement to employees last week saying: “Our plan is to return to an office-centric culture as our baseline. We believe it enables us to invent, collaborate, and learn together most effectively.” 

Not exactly a ringing endorsement of the new work-from-home age, then. 

Part of the hesitancy is that although many employees want more flexibility, it’s still not at all clear what kind of model works for the companies. 

“None of us have this all figured out,” said Carolyn Everson, vice-president of Facebook’s global business group, when talking about current work-from-home arrangements.

“We are making this up on the fly.”

Remotely attractive

Harvard Business School professor and remote working advocate Prithwiraj Choudhury says that tech companies have long been at the vanguard of remote working.

“The early adopters and the companies that are embracing this model and building the organisation around that remote work model will have a huge advantage in attracting talent”, he says. 

That is certainly the hope. 

No tech business wants to lose able employees to rivals who will allow them to work more flexibly. 

Companies like Spotify now appear to have some of the most “flexible” working practices for its staff. 

In a recent statement it said: “Our employees will be able to work full time from home, from the office, or a combination of the two. 

“The exact mix of home and office work mode is a decision each employee and their manager make together.”

But it did add: “There are likely to be some adjustments to make along the way.” 

So Spotify’s definition of flexible working is very different to Google’s, which in turn is very different to Amazon’s. 

Young office workers masked up look at their laptops in an office setting

Working from home while there is no office open is one thing. But remote working’s biggest test is going to be when the office starts opening up – let’s say at 50% capacity. 

When meetings are being held partially in person and partially on Zoom, is the dynamic going to work quite so well? 

And when some team members develop face-to-face, in-person relationships with managers, will remote workers feel disadvantaged? 

Last week, IBM announced its proposed system of remote working, with 80% of the workforce working at least three days a week in the office. 

“When people are remote I worry about what their career trajectory is going to be,” said IBM chief executive Arvind Krishna.

“If they want to become a people manager, if they want to get increasing responsibilities, or if they want to build a culture within their teams, how are we going to do that remotely?” he asked.

Tantalisingly, we are about to find out what works and what doesn’t, because there are so many differing approaches being taken by tech companies. 

And like so much of modern day life, other businesses are looking over at the west coast of America to see what’s working here – and what isn’t.

Source: BBC

EU antitrust watchdogs to have more say over tech, pharma, biotech start-up deals

BRUSSELS (Reuters) – EU antitrust regulators are set to have more say over small merger deals involving start-ups in the technology, biotechnology and pharmaceutical industries, the EU enforcer said on Friday, in a warning to big companies eyeing such deals.

The move comes amid regulatory concerns on both sides of the Atlantic that a buying spree of start-ups by big companies, which do not trigger competition scrutiny because of the low value of the deal, may be so-called killer acquisitions.

This refers to a company buying a potential rival still in a nascent stage with the aim of shutting it down.

Critics have often cited the hundreds of small companies acquired by Alphabet’s Google and Facebook in recent years while supporters say such deals provide the money and resources to help start-ups to grow.

The European Commission said it wants national competition watchdogs to refer more small deals to the EU enforcer.

“A more frequent use of the existing tool of referrals under Article 22 of the Merger Regulation can help us capture concentrations which may have a significant impact on competition in the internal market,” European Competition Commissioner Margrethe Vestager said in a statement.

The Commission cited recent deals in the digital, pharmaceutical, biotechnology and certain industrial sectors which had escaped regulatory scrutiny.

U.S. tech companies use their expensive stock to pay for acquisitions

Cash may be king, but stock is queen in the land of technology mergers and acquisitions during a pandemic-fueled tech boom.

Close to half the U.S. deals in the sector included a stock consideration last year, the highest percentage since 2016, versus only 27% in 2019, according to financial data provider Refinitiv.

By comparison, 39.5% of deals across all sectors used stock last year. The tech trend continued into 2021 as half of the deals in the sector announced in the first quarter also used stock.

Company stock has even more frequently funded mega deals. The six largest technology deals in 2020 all used stock, including semiconductor maker Advanced Micro Devices Inc’s $35 billion acquisition of Xilinx Inc and Salesforce.com Inc’s agreement to buy messaging app Slack Technologies Inc for $27.7 billion.

The popularity of stock as currency for deals has been fueled by the soaring valuations in the sector, dealmakers said. The NASDAQ 100 Index is trading at 39.5 times its price-to-earnings, the highest since 2000, as investors bet on firms benefiting from the expansion in cloud computing and remote working in the aftermath of the COVID-19 pandemic.

This has made acquirers keener to use their highly valued shares, rather than cash, to pay the frothy premiums that targets ask for. While an all-stock or cash-and-stock deal may dilute the shareholders of the acquirer through the issuance of new shares, it reduces the risk of it overpaying because it hinges more on the relative valuation of the two companies, rather than the absolute valuation of the target, investment bankers said.

“It allows buyers and sellers to participate equally in the upside or downside, as opposed to getting cashed out,” said Mike Wyatt, Morgan Stanley’s global head of technology M&A.

When identity management company Okta Inc clinched a $6.5 billion deal earlier this month for rival Auth0, it used just its shares to fund the purchase. The deal valued Auth0 at about 26 times forward revenue multiple, compared to a forward revenue multiple valuation of about 28 times revenue for Okta.

“Some people think the deal overvalued Auth0, but it is actually lower than our multiple,” Okta CEO Todd McKinnon said in an interview, adding Auth0 was also growing faster than Okta.

Stock deals can also come with tax benefits for the acquisition target. Deal proceeds are not taxable at the corporate level in the United States as long as stock makes up at least 40% of the purchase price consideration.

Dealmaking in the U.S. technology sector has blossomed during the pandemic. The first quarter of 2021 has seen the highest tech deal volume ever, with over 700 deals totaling $155 billion announced. Tech transaction volumes in 2020 jumped by 72% to $383 billion, Refinitiv data shows.

News Corp reaches three-year deal with Facebook in Australia

News Corp said on Monday it had reached a three-year agreement to provide Facebook Inc users access to news in Australia.

Last month, Australia’s parliament passed a law that requires Alphabet Inc’s Google and Facebook Inc to pay media companies for content on their platforms, after robust negotiations in which Facebook blocked all news content in the 13th-largest economy.

The agreement announced on Monday involves News Corp’s The Australian national newspaper, and metropolitan papers such as The Daily Telegraph in New South Wales. Sky News Australia has also reached a new agreement with Facebook, News Corp said.

The three-year deal follows an agreement reached in October, 2019 in which News Corp publications in the United States receive payments in exchange for access to additional stories it would provide for Facebook News.

Russia rebukes Facebook for blocking some media posts

MOSCOW (Reuters) – Russia accused Facebook on Monday of violating citizens’ rights by blocking some media outlets’ content in the latest standoff between a government and Big Tech.

Communications watchdog Roskomnadzor at the weekend threatened Facebook with a minimum 1 million rouble ($13,433) fine and demanded it restore access to content posted by TASS news agency, RBC business daily and Vzglyad newspaper.

It said Facebook blocked posts pertaining to Russia’s detention of alleged supporters of a Ukrainian far-right group.

“I think this is unacceptable. It violates our national legislation,” said Vyacheslav Volodin, speaker of the lower house of Russia’s parliament and a member of President Vladimir Putin’s United Russia ruling party.

In a statement, Volodin said Facebook had violated basic rights to disseminate and receive information, and legislation would be proposed to preserve Russia’s “digital sovereignty.”

Facebook did not immediately respond to a request for comment.

Like other nations, including Australia in a high-profile dispute with Facebook and India in a spat with Twitter, Russia has in recent months taken steps to regulate and curb the power of big social media companies.

Bills passed in December allow Russia to impose large fines on platforms that do not delete banned content and to restrict access to U.S. social media companies if they are deemed to discriminate against Russian media.

“They operate in our environment but at the same time they often don’t obey any Russian laws,” Russian Foreign Ministry spokeswoman Maria Zakharova told RIA news agency on Monday.

($1 = 74.3400 roubles)