Are companies cracking down on remote work to get employees to quit?

Are return-to-office mandates actually a stealth tactic to get employees to quit? It’s a suspicion I’ve heard from a lot of people since RTO efforts started in earnest in 2022. For years I didn’t take the theory seriously: It struck me as incredibly cynical. Besides, it didn’t make any sense from a business perspective. What company in its right mind would risk a mass exodus just to save a few dollars on severance packages? But over the past year I’ve started to wonder if the cynics are right.

It started with Amazon‘s decision to end hybrid work last fall. When employees expressed their unhappiness over the decision, an executive responded with a clear signal: “There are other companies around.” Then there was the unsubtle declaration from Elon Musk and Vivek Ramaswamy, who predicted their in-office mandate for federal employees would spur “a wave of voluntary terminations that we welcome.” Last month, when Intel ordered employees to start coming in four days a week, it warned that it needed to shrink its workforce — adding to the ranks of companies like IBM and Dell announcing stricter office attendance requirements and job cuts in more or less the same breath. Last year, when the software provider BambooHR surveyed VPs and C-suite executives, 25% said they hoped for some voluntary turnover as a result of their RTO mandates. It turns out the cynics weren’t so cynical after all: For many employers, ordering people back to the office has become an unofficial tool of attrition.

Companies are right to believe that making people come into the office will drive some of them away. If I’ve learned one thing from reporting on the RTO wars over the past few years, it’s that people really like the ability to work from home. They like it so much that, on average, they value it as a job perk equivalent to 8% of their salary — a number that may be as high as 25% among tech workers. If your business isn’t doing well, or if you need to reallocate head count among departments, it makes sense to force some attrition — especially during a period of economic uncertainty, when virtually no one is quitting their job. By pushing employees to leave voluntarily, employers reduce their payroll without having to provide the departing workers with severance or health insurance. It’s layoffs on the cheap.

The RTO push isn’t just financial. Bosses want to go back to happier pre-pandemic times when everyone was in the office all the time, even if that means losing a few stars in the process. They think employees will be more productive under the watchful gaze of their managers. They think teams will get along better by seeing one another in person. They think that their new grads will learn faster by overhearing the conversations of their mentors, and that people from different teams will run into one another around the watercooler and come up with the next breakthrough idea. The more of that, the better, they think — and soon even the reluctant workers will realize this was the better way all along, so best just to eliminate work-from-home days altogether. “It will look just like it did before,” JPMorgan CEO Jamie Dimon explained, “and everyone’s going to be happy with it.”

So companies see an upside, both financial and cultural, in putting an end to hybrid work. And they’re gambling that in the current job market, most employees will have no choice but to come into the office as ordered. Sure, some people will grumble about losing their work-from-home lifestyles. And some may even quit. But in a time of corporate contraction, that can seem like a good thing. When you’re trying to slash your workforce by 20%, every employee who leaves is one fewer employee you have to lay off.

Given the current state of the job market, their gamble might well pay off. But I think employers may be underestimating the downsides of RTO mandates. For starters, spurring a voluntary exodus gives companies no control over how many employees will quit. That means they could end up overshooting their target: When the dating app Grindr revoked its work-from-home policy in 2023, nearly half its workforce resigned. That kind of wholesale flight is unlikely in the current job market, but it underscores the risk of rolling the dice with an RTO mandate.

Ordering people back to the office means you’ll lose some of your best people.

Even more importantly, companies can’t control who decides to leave. Researchers who studied the effects of RTO at Apple, Microsoft, and SpaceX found that the companies lost more senior employees than low-level workers. And in a broader study of companies in the S&P 500, researchers found that employers also lost some of their most skilled employees. “You’re going to get negative selection,” says Nick Bloom, an economist at Stanford who studies remote work. “The ones who leave are the ones that can pull an outside offer, who are the better employees.” Yes, the rocky state of the job market will prevent most employees from jumping ship. But the best of the best will always be in demand. That’s especially the case right now for AI specialists, who are the very workers businesses can least afford to lose in the AI wars. Ordering people back to the office means you’ll lose some of your best people.

Some employers are getting around the brain drain by quietly exempting their mission-critical employees from the RTO mandates. Sometimes these exemptions are official, covering entire teams assigned to high-priority projects or individual hotshots the company doesn’t want to lose to a competitor. But in many cases, the exemptions are unofficial: a middle manager, say, who looks the other way when high performers don’t come into the office every day. Either way, exemptions foster a sense of inequality, which can lead to resentment among employees who feel they’re being treated unfairly. In one study, job satisfaction ratings declined significantly post-RTO — and unhappy employees make for unproductive ones. Companies might think that ordering everyone back to the office will foster an esprit de corps and spur everyone to greater heights of creativity and innovation. But the data suggests otherwise.

In short, companies that adopt a take-it-or-leave-it attitude over RTO can wind up getting the worst of both worlds. They lose their top talent while retaining their average and low performers — employees whose performance will likely dip even lower in the post-RTO regime.

Now, let’s assume that the CEOs who are implementing RTO mandates are aware of the risk they’re taking. So why don’t they just do things the old-fashioned way and lay people off, instead of trying to force them to leave? By choosing whom to fire, they could keep their best employees and let their mediocre ones go. That’s what companies like Microsoft and Meta are doing: aggressively laying off those they view as low performers to make room in their budgets to hire more AI engineers.

But layoffs also come with a significant downside. Studies show they create a culture of fear, which affects the productivity and performance of the employees who survive — perhaps even as much as an RTO mandate would. When it comes to making cuts to their workforces, employers are going to pay a price no matter how they go about it. The question is: What’s the best way to mitigate the negative consequences in the current environment?

Over the past five years, an army of economists, organizational psychologists, and management scholars has scrutinized every aspect of our great work-from-home experiment. Their conclusion is unequivocal: By almost any metric, hybrid work works. It boosts employee engagement, maintains productivity, and engenders loyalty and retention among high performers. So one answer for companies that need to cut their workforce might be to zig when everyone else is zagging. By limiting RTO to three days a week, say, instead of four, companies can hold on to more of their superstars than their corporate rivals, while still enjoying the benefits of in-person collaboration. Yes, they might have to increase layoffs in the short run. But when the economy rebounds, as it eventually will, they’ll be better positioned to expand. By bucking the trend, companies can stand out from the crowd. And in a crowded market, being a standout is exactly where you want to be.

Aki Ito is a chief correspondent at Business Insider.

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