Even Buffett wonders if we’ll return to offices
Berkshire Hathaway CEO says virus could lead to longer-term shift
Count Warren Buffett among those questioning the future of offices.
The 89-year-old chairman and chief executive of Berkshire Hathaway Inc., who has spent years railing against corporate bloat, said on Saturday that the coronavirus pandemic could lead to longer-term shifts in the way people do their jobs. With offices closed and cities sheltering in place, millions of people have spent the past few weeks working remotely.
“The supply and demand for office space may change significantly,” Mr. Buffett said. “A lot of people have learned that they can work at home, or that there’s other methods of conducting their business than they might have thought from what they were doing a couple of years ago. When change happens in the world, you adjust to it.”
Like many Americans, Mr. Buffett said it had been more than seven weeks since he had put on a tie. “It’s just a question of which sweatsuit I wear,” he joked.
The comments came last weekend during Berkshire’s annual meeting in Omaha, Neb., a more than four-hour affair followed by investors worldwide. Typically, thousands of shareholders attend the event in person to hear Mr. Buffett and his longtime business partner, Charlie Munger, muse about the state of the company and the world.
This year’s event was streamed from an empty arena. Mr. Munger wasn’t present and Mr. Buffett answered questions submitted by shareholders via email.
Mr. Buffett spent much of his time making a bullish case for the long-term health of the American economy, doing so at times in a format he has long shunned: a slide presentation. He also touched on the future of jobs at his company, his opinion of the Paycheck Protection Program meant to aid small businesses and how the nation should be treating front-line workers.
Berkshire Outlook: Layoffs Possible
Berkshire, a conglomerate that includes the insurance company Geico, railroads, energy companies and brands such as Dairy Queen and See’s Candies, employs about 391,500 people.
Even though Berkshire held about $137.3 billion in cash at the end of the first quarter, Mr. Buffett said it is possible the company may need to lay off some workers in the short term.
At Berkshire, the company’s manufacturing businesses could see a steep drop in demand, Mr. Buffett said. “In those cases, we would have layoffs at some point,” he said. Still, over the long term, he said he expected the company to keep hiring. “Five years from now, I think Berkshire will be employing considerably more people,” Mr. Buffett said.
The PPP: ‘hell to Administer’
While none of Berkshire Hathaway’s fully owned subsidiaries has applied for government stimulus or assistance under a loan program for small businesses, Mr. Buffett praised the efforts.
The Paycheck Protection Program, which gives loans to businesses with 500 or fewer employees that can be forgiven if they don’t lay off workers, was a “very good idea,” he said.
The program has drawn intense criticism from small businesses frustrated in their attempts to receive loans, and some public companies that secured the money have returned it after blowback.
Mr. Buffett said he credited Congress and other public officials for acting swiftly.
“It must be hell to administer,” he said. “It just isn’t that easy to inaugurate incredibly large (programs). There’s going to be a certain amount of fraud. Everything doesn’t go perfectly. But I’m 100% for taking care of the people that really get hurt by something that they had nothing to do with.”
‘We Don’t Even Know Their Names’
Asked how the country could better support health care workers, delivery drivers and food-service employees on the front lines, Mr. Buffett suggested they deserved higher wages and more respect.
“They’re working 24 hours a day, and we don’t even know their names,” he said. “We ought to do things that help those people.”
An ideal economy should allow low-wage workers to raise a family on income from a single 40-hour-a-week job, Mr. Buffett said. Many front-line workers must maintain multiple jobs, and employees at meat plants and warehouses have taken to walking out of their companies in recent weeks to protest working conditions.
“They’re contributing a whole lot more than some of the people that came out of the right womb or got lucky and know how to arbitrage bonds or whatever it might be,” he said.
“You would think with our prosperity, we would hold ourselves to even higher standards of taking care of our fellow man — particularly when you see a situation like you’ve got today.”
Though living conditions had improved for those earning the lowest 20% in wages over the past 100 years, “it’s really improved for the top 1%,” Mr. Buffett said.