Weekly Update

Reddit adopts no remote work policy, moving staff to Silicon Valley

Reddit, the so-called front page of the Internet, has just recently raised $50 million in a series B round ($500 million valuation), and plans to return some part of that funding to its community of users in the form of a new cryptocurrency. But that’s not why I am writing about Reddit today.

No, the reason I’m writing this is that Reddit has told the workers outside of the Bay Area that they have to move there is they want to continue working for the company. And it seems like the initial announcement required them to agree to the move in only a few weeks. The CEO, Yishan Wong, now says they have a few months to decide and move. David Heinemeier Hansson, the co-founder of Basecamp, asked Wong about the news on Twitter:

Screenshot 2014-10-05 10.48.29

 

So, let’s review the bidding. Company raises money for the purpose of expanding — hiring more people — after being valued at $500 million, because of the productivity that the distributed company had achieved. Approximately half of the staff is located outside the Bay Area, with concentration in Utah and New York City, according to others. Now the CEO wants to move those folks — and hire more — in the Bay Area, which has a very high cost of living, and notoriously competitive job market.

And the rationale? ‘Optimal teamwork’.

This is the Yahoo/Best Buy ‘no remote work’ mantra all over again. The premise is that a company can’t achieve some desired level of ‘teamwork’ unless they are all co-located in a specific cul de sac in Northern California.

Hansson and Basecamp of course are well-known for their advocacy of remote work. But the thinking in high tech Silicon Valley is swinging to the other extreme, and I believe it’s more about inculcating a uniform culture in these companies than productivity, per se. Marissa Mayer was confronted with a Yahoo that she believed needed to be recast as a start-up, despite its age and size. The jury is out on the effectiveness of that effort, but many critics — me included — think she’s spent a great deal of time buying start-ups and has little to show for it. Without the Alibaba shares, Yahoo would be categorized as the walking dead. She’s no poster child for the astonishing returns on ‘optimal teamwork’.

Wong’s move is apparently independent of the funding, something he wanted to do anyway, but it has to be enormously disruptive and material to the company’s operations, so the investors must be aware of the action and supportive of the costs. They have to agree with the basic notion, that consolidating everyone in one place — Silicon Valley — is the right thing to do.

Obviously, I think this is bad policy choice, and presumably behind it is a Mayer-type logic: that in order to increase ‘teamwork’ the company needs to be co-located. Perhaps there is a different issue at play — like dissent about company direction in the New York or Utah offices — and the ‘optimal teamwork’ story is a cover. I don’t know. But once again remote work is being cast as unproductive, and that is a shame.