Home­ward bound

BP boss Looney pre­dicts a world where of­fices are no longer cru­cial

The Daily Telegraph - Business - - Front Page - Ben Marlow

Rein­ven­tion, re­or­gan­i­sa­tion, and now re­con­fig­u­ra­tion. Bernard Looney’s “reimag­i­na­tion” of BP has set­tled on a very def­i­nite theme. There are even 10,000 re­dun­dan­cies to re­ally ham­mer home the point. But here’s a new one from the new boss: re­mote work­ing. The oil gi­ant is re­port­edly draw­ing up a plan that could see as many as 50,000 em­ploy­ees adopt­ing a sort-of hy­brid ap­proach that com­bines work­ing from home with of­fice-based hot-de­sk­ing. That’s al­most three quar­ters of its work­force.

Ac­cord­ing to The Guardian, the re­view is likely to stop short of a 75pc re­duc­tion in of­fice space. How­ever, the fi­nal cut­back could still re­sult in its foot­print re­duced by half. The im­pli­ca­tions of a com­pany like BP down­siz­ing in such an ex­treme way are clearly mas­sive.

The prop­erty in­dus­try is des­per­ately play­ing down the work­ing from home ex­per­i­ment, in­sist­ing that it is tem­po­rary. “The of­fice is far from dead,” protested Der­went Lon­don boss Paul Wil­liams this week de­spite oc­cu­pa­tion lev­els across the firm’s Lon­don of­fice blocks run­ning at just 15pc. Wil­liams pre­dicts it will be back up to 50pc by the end of the year, and im­prove fur­ther in 2021, but that is noth­ing more than a guess and a hugely op­ti­mistic one at best.

Land­lords are bet­ting, or per­haps pray­ing, that peo­ple will even­tu­ally head back to the of­fice ei­ther will­ingly or be­cause em­ploy­ers have or­dered them back.

This is wish­ful think­ing. Life has changed, al­most cer­tainly per­ma­nently. Any chief ex­ec­u­tive with an ounce of sense will re­alise that the world has just van­ished from un­der their feet, which means mak­ing some bold calls now.

Bar­clays boss Jes Sta­ley was al­ready declar­ing large cor­po­rate head­quar­ters dead back in April, say­ing they are “a thing of the past,” after re­al­is­ing that the vast ma­jor­ity of the bank’s 80,000 staff could work from home with lit­tle im­pact on day-to-day op­er­a­tions. RBS has or­dered 50,000 staff to work from home un­til at least 2021. It is a scene that is be­ing re­played across the cor­po­rate land­scape. Anec­do­tally, big com­pa­nies are talk­ing about re­duc­ing their foot­print by be­tween 30pc and 40pc on av­er­age.

It’s not just the prac­ti­cal­i­ties of hav­ing large num­bers of peo­ple in one place from now on. This is a once-in-sev­eral-gen­er­a­tions op­por­tu­nity to take an axe to the cost base like never be­fore. Looney is call­ing this BP’s “big­gest re­or­gan­i­sa­tion in over a cen­tury”, and although he’s talk­ing pri­mar­ily about his at­tempts to move away from fos­sil fu­els, any proper cor­po­rate moderni­sa­tion must now con­sider the im­pact of the pan­demic, to­gether with new tech­nol­ogy, on work­ing ar­range­ments.

That in­evitably means rein­ing in sprawl­ing global em­pires with acres of dead floor space. BP has of­fices in nearly 80 coun­tries and Looney has claimed (nat­u­rally via LinkedIn) that the com­pany is at a “dig­i­tal in­flec­tion point”, a warn­ing, it would seem, that sweep­ing change is around the cor­ner.

The im­pli­ca­tions are ob­vi­ously huge for prop­erty de­vel­op­ers but the big­ger con­cern is what it means for our ci­ties, the busi­nesses that de­pend on of­fice work­ers for their liveli­hoods, and pub­lic trans­port. For busi­ness dis­tricts dom­i­nated by high-rise tower blocks, like the City and Ca­nary Wharf, the ram­i­fi­ca­tions could be dis­as­trous.

Cur­tain falls on an­other film ti­tan

So long to Sum­ner Red­stone, ti­tan of the film in­dus­try, who has gone to join the great movi­ethe­atre in the sky.

Red­stone was a Hol­ly­wood colos­sus who turned his fa­ther’s pro­vin­cial drive-in cin­ema chain into a global en­ter­tain­ment em­pire that in­cluded Para­mount Pic­tures, CBS, Vi­a­com and MTV. The bil­lion­aire was fa­mously ill-tem­pered and led a colour­ful per­sonal life even in old age, which would have made for the most grip­ping of soap operas.

But he will be re­mem­bered as a true in­dus­try pioneer. His pre­dic­tion that “con­tent is king” proved to be bril­liantly prophetic, even if it was a de­vel­op­ment that has ac­cel­er­ated the demise of the tra­di­tional me­dia houses.

Moguls like Red­stone, Ru­pert Mur­doch and Sil­vio Ber­lus­coni have found them­selves sur­passed by a new gen­er­a­tion of up­starts from Sil­i­con Val­ley as the in­ter­net has com­pletely changed the way we con­sume en­ter­tain­ment.

Con­sumers are now able to watch what they want, when they want, and on any de­vice, leav­ing a new school of tech ti­tans such as Reed Hast­ings at Net­flix, Ama­zon’s Jeff Be­zos, Google boss Sun­dar Pichai, Tim Cook at Ap­ple and even Alibaba founder Jack Ma to bat­tle for supremacy.

Peo­ple may have feared the likes of Red­stone and the power the old guard wielded but they were al­most fee­ble when com­pared against the new tech aris­toc­racy.

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