How Tech’s Empty Offices Helped San Francisco Bend the Curve

Bookmark

(Bloomberg) --

With the exception of outdoor exercise and quick, furtive dashes to the corner grocery store, swathes of Northern California have now been sheltering in place for more than a month.

The San Francisco Bay Area’s stay-at-home order was announced March 16, and that swift decision—the first in the nation—is now widely credited with #BendingtheCurve, buying our health care system time and saving lives.

In truth, though, the Bay Area was bending the curve roughly 10 days before then, thanks to the early action of the region’s biggest employers. Apple Inc. encouraged its Silicon Valley employees to work from home on March 6. Salesforce.com Inc., the largest private employer in San Francisco, told its California employees to begin telecommuting March 7. In-person classes at Stanford University were cancelled starting March 9. And Twitter Inc., which strongly encouraged work from home on March 2, announced in a blog post it would be mandatory March 11. Countless smaller companies and startups in the Bay Area who never got headlines for their actions were doing the same.

How Tech’s Empty Offices Helped San Francisco Bend the Curve

By contrast, New York State’s stay-at-home order went into effect the evening of March 22. But Silicon Valley’s myriad tech companies were lucky in that they’re better suited than most for remote work, as they typically don’t involve in-person interaction with physical objects. That enabled many employers in the region to make the move quickly without devastating their businesses. 

“From the very beginning we’ve talked about bold leadership from Google, Facebook, Salesforce and others,” said Dr. Robert Wachter, the chair of the Department of Medicine at the University of California, San Francisco. “One of the factors is the actual removal: You have a big chunk of the region’s workforce no longer interacting with each other," he said. The moves “also set a tone that was very important." Politicians had more cover to make tough choices, Wachter said, once “big, smart companies that have led the world in looking around the corner and using data to make decisions were telling everyone to stay home.”

The effect was more than motivational. Not only were tens of thousands of workers not congregating in offices, they also weren’t going out to restaurants and, critically, weren’t taking public transit.

Dr. George Rutherford, an epidemiologist at UCSF, has included a slide in his recent presentations that shows how restaurant reservations via OpenTable dropped more precipitously in San Francisco than in Los Angeles and New York City. And the numbers of people taking Bay Area Rapid Transit, the local subway system known as BART, began falling in the first week of March. There was a 5% drop in ridership on Monday, March 2, and a 10% drop by that Thursday.

“Our ridership began dropping the first week of March and we believe this is directly tied to the fact major employers started requiring or strongly encouraging people work from home,” Alicia Trost, chief communications officer for BART, said in an email.  By Friday March 13, weekly ridership had fallen by half, Trost said. 

Now, as the conversation in the U.S. turns toward re-opening society and the economy, if tech companies’ early moves are any indication, the Bay Area will proceed extremely carefully. Mark Zuckerberg, the chief executive officer of Facebook Inc., wrote in a post Thursday that the vast majority of Facebook employees will work from home through at least the end of May. And with summer camps likely to cancel, leaving some working parents without childcare, many Facebook employees also plan to work from home through at least the summer.

Carl Guardino, the CEO of the Silicon Valley Leadership Group, expects that much will change as the region slowly gets back to work. Even the mostly empty streets during the lockdown, which some residents noted have produced cleaner air, might not snap back to the way things were.

“Pre-Covid-19 normal will not be the post-Covid-19 normal,” Guardino said. “The days of the handshake are behind us. Physical distancing will be much more formalized in all kinds of work, and I think people now realize that they don’t need to drive to every meeting like they had in the past.”

Much of the Valley is prepared to hunker down for a long time to come. The tech industry was a model of caution going into the crisis. It’s likely to be one coming out of it too. 

If you read one thing

It's earnings season, which means greater clarity into who's growing and who's shrinking in the current economic crisis. On Tuesday, Netflix said it had added a record number of subscribers in the quarter, almost doubling Wall Street expectations. Texas Instruments reported sales that topped analyst estimates. Snapchat said usage was accelerating. And Lyft, which reports in early May, followed Uber in pulling its 2020 financial estimates, as ride-hailing demand has tanked. 

And here’s what you need to know in global technology news

Epic Games, maker of the video game phenom Fortnite and the quarantine-popular app Houseparty, is raising money at a valuation said to be higher than $15 billion. The company is looking to raise between $500 million and $1 billion in the funding round. 

Expedia, hit hard by lockdowns, is in talks to sell itself for about $1 billion to private equity firms.

Amazon is spending $10 million to help conserve forests and mitigate the impact of climate change. 

Top officials at the World Health Organization have been increasingly targeted by hackers, the group said

Uber's business fell by about 80% in recent weeks, according to a report in the Information

©2020 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.