Synchrony Financial Disclosed Radical Work-from-Home Plan, Layoffs, and “Office Footprint” Reduction

Synchrony Financial Disclosed Radical Work-from-Home Plan, Layoffs, and “Office Footprint” Reduction

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Landlords and their lenders who’re still thinking work-from-home is just a blip will undergo a reckoning in due time.

By Wolf Richter for WOLF STREET.

Synchrony Financial, GE’s consumer financial services spinoff with 16,500 employees according to its website – presumably before the layoffs – announced during its earnings call this morning that it has “realigned and reimagined the way we work,” and that it would lay off people, and that it would close offices entirely, and that it would reduce the size of other offices, and that it would now allow all employees and require some employees to work from home permanently.

This is the latest in a series of major companies having made similar announcements, including Microsoft. But Synchrony’s proposal appears to be more radical in that it:

  • Allows all its US employees to work from home permanently.
  • Requires some employees to work from home all the time with no access to an office.
  • Requires all employees to work from home at least some of the time.
  • Requires even management with “assigned seats” to work from home at least 1-2 days a week.

Citing “safety and maximum flexibility for employees as a backdrop,” CEO Margaret Keane explained that the company has embarked  on a cost-cutting mission, with cost savings of $150 million to $250 million in 2021, that entails an $89 million restructuring charge right off the bat, plus layoffs, work-from-home on a permanent basis, and drastically reducing its “physical footprint” – namely office space.

“We have reduced the size of some of our sites, and closing other sites entirely,” she said during the earnings call (transcript via Seeking Alpha).

“These changes stemmed from our employees’ desire to work from home. Their productivity in this environment will help us drive long-term efficiency and profitability of our business,” she said.

“We are also being thoughtful, targeted and aggressive on our cost structure as we move forward, allowing us to continue our focus and investment in future growth,” she said.

In a memo to employees, reported by Bloomberg today, CEO Keane and Synchrony President Brian Doubles explained that Synchrony will have three types of offices:

  • Virtual offices: employees will work from home permanently, and there is no office they can go to.
  • Hoteling offices: employees work at home permanently, but if they need to, can book a desk at a nearby office location.
  • Hybrid offices: employees can work from home but they have an assigned seat at a nearby office where they can work at least three days a week.

Even executives with assigned seats — so other executives don’t have assigned seats? — will be expected to work from home one or two days a week, to “role model our work-at-home mindset,” the memo said.

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Wolf Richter

In his cynical, tongue-in-cheek manner, he muses on WOLF STREET about economic, business, and financial issues, Wall Street shenanigans, complex entanglements, and other things, debacles, and opportunities that catch his eye in the US, Europe, Japan, and occasionally China. WOLF STREET is the successor to his first platform… TP-Title-7-small-200px …whose ghastly name he finally abandoned in July 2014. Here’s the story on that. Wolf lives in San Francisco. He has over twenty years of C-level operations experience, including turnarounds and a VC-funded startup. He earned his BA and MBA in Texas and his MA in Oklahoma, worked in both states for years, including a decade as General Manager and COO of a large Ford dealership and its subsidiaries. But one day, he quit and went to France for seven weeks to open himself up to new possibilities, which degenerated into a life-altering three-year journey across 100 countries on all continents, much of it overland. And it almost swallowed him up.