Return-to-office measures and adoption of AI are reshaping the workplace

The year of RTO: In 2024, the business climate pushed businesses and industries farther from pandemic-era remote and hybrid models to multiday or even full return-to-office (RTO) mandates. 

• The shift back to offices was driven in part by Big Tech requiring staff on site to justify expensive commercial rentals and newly constructed office spaces. 
• Technology like Zoom, Slack, and Teams, which thrived as the connective tissue between remote workers, similarly lost their luster as usage dipped. Meta shut down its Slack rival, Workplace, to focus on AI.

Big Tech led the shift back to office: Management directives to bring workers back into offices chafed some workers who embraced remote work. Some had relocated to other cities or countries and adjusted their workflow around remote or home offices.

The in-office requirements led to pushback across the tech landscape.

• 50% of Dell’s US workforce opted to live with the consequences of staying remote, undermining Dell’s efforts to restore its in-office culture. Remote workers had to agree that they wouldn’t be promoted or hired for new roles as long as they remained remote. 
• RTO mandates at Microsoft, Apple, and SpaceX drove a significant number of senior employees to leave their jobs, according to a study by researchers from the University of Michigan and University of Chicago.
• So many Amazon employees clocked in briefly then left—to prove they were following the rules—that the company imposed guidelines on the number of hours workers had to be on-site to prevent “coffee-badging.”

Industry layoffs and the AI shift transformed various sectors: Driven by realignment efforts and AI adoption, various companies implemented layoffs while restructuring around AI adoption.

• TikTok laid off 500 employees as it shifted content moderation from humans to AI agents.
• Dell cut 2,500 jobs, or 10% of its workforce, as part of a wider AI pivot.
• Intel laid off over 15,000 employees, or over 15% of its workforce, in its efforts to save $10 billion by 2025. 
• Intuit, the owner of TurboTax, cut 1,800 jobs, or 10% of its employees, to focus on its generative AI (genAI) program, Intuit Assist, and other AI initiatives.
• Cisco Systems said in a filing with the Securities and Exchange Commission (SEC) that it would lay off 7% of its global workforce, or around 5,500 employees, to accommodate AI investments.

Outlook for 2025: RTO mandates and increased investment and expansion into AI are likely to continue for the foreseeable future. As of October, 36% of business professionals worldwide were using chatbots and virtual assistants for customer service, and 47% were considering using them in the future, per The Harvard Business Review.

Our take: AI’s continued evolution beyond chatbots and into critical business tools and AI agents will continue to transform the business landscape. Companies that can leverage the new technology while investing in training employees could see sizable gains in productivity. 

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