As tech companies bring workers back to downtown Seattle, Zillow holds firm on ‘Cloud HQ’ – GeekWire

Seattle leaders want workers back downtown, but some companies are committing to policies that allow for remote work. (GeekWire File Photo / Kurt Schlosser)

Amazon, Starbucks and other large companies are mandating that workers return to the office with the hope that in-person interactions spur more creativity, productivity and profits. 

But one Seattle tech CEO is not buying that argument.

“When you give people something they value, you can’t stuff the genie back in the bottle,” said Zillow Group CEO Rich Barton.

The Seattle-based online real estate company employs 5,700 workers and made a big shift to remote work early in the pandemic. About 40% of Zillow’s workforce lived in the Seattle area pre-pandemic; now just about a quarter are in the city as the company broadened its hiring footprint across the country.

Barton is not going back to the way things were pre-COVID. He’s locked on a concept that he dubs “Cloud HQ,” arguing that remote work benefits employees, teams and company culture. 

Critics abound, and some research points to the downsides of remote work. Earlier this week, Meta founder Mark Zuckerberg said the company’s new engineers performed better on average if they started working in-person versus those who joined remotely.

But Barton is not budging. 

Zillow Group CEO Rich Barton. (Zillow Group Photo)

“There’s a new physics to work,” said Barton in a recent interview with GeekWire. “Those who figure out the new social physics and the new cultural physics … are going to be the winners in the future.”

Seattle’s civic leaders would love to get a company like Zillow and its 1,507 employees in Washington state back into their downtown offices on a regular basis. Seattle has one of the lowest return-to-work rates in the country, driven in part by the city’s heavy reliance on tech workers who can more easily do their jobs remotely. 

Worker foot traffic in downtown Seattle stands at 47% when compared to 2019, though those numbers are certainly set to increase as Amazon brings back its workforce in May

At the “State of Downtown” annual event this week, Downtown Seattle Association CEO Jon Scholes applauded Amazon’s back to office plans, calling it a rallying cry for other businesses to follow.

But Zillow, whose employees once filled several floors of the Russell Investments Center, will not be coming back to its pre-COVID form. In August 2020, it had 2,700 employees in Seattle.

Asked about his moral obligation to Seattle as a major employer that was birthed in downtown, Barton said it “weighs on me.” 

He’s a member of the Challenge Seattle coalition of CEOs, and Zillow is a member of the Downtown Seattle Association. Even still, he’s adamant about the changing dynamics of work.

“They’re not very pleased with my talking about this,” said Barton of his peers at Challenge Seattle and Downtown Seattle Association.

Noting the challenge of revitalizing downtowns post Covid, Barton readily admits that “It’s a difficult problem.”

In August 2020, GeekWire took a close look at the neighborhood around Zillow’s headquarters, speaking about the impact of one of Seattle’s largest tech employers being remote. 

Zillow does still offer office space in the Russell Investments Center to those who want to use it, but there is no requirement that workers show up everyday.

Barton admits that his views on remote work are not popular among tech CEO peers, who he said are using the reshaping job market to retake “territory” lost during COVID. Many executives want to remove the flexibility that workers gained during the pandemic, he said.

“That’s what so many companies are doing right now,” said Barton. “And I’m just sitting back and going, they just don’t get it.” The future of work for tech workers “is in the cloud,” he said.

In February, Amazon CEO Andy Jassy mandated that tech and office workers return to the office three days per week starting in May. 

Jassy’s memo included a number of reasons for the decision, noting that “it’s easier to learn, model, practice, and strengthen our culture when we’re in the office together most of the time and surrounded by our colleagues.”

During the pandemic, then-Netflix CEO Reed Hastings called remote work “a pure negative.”

Barton, who has served on the Netflix board for more than two decades, said he and Hastings have “vigorous debate” on the topic. 

“I really do believe there are a lot of different ways,” said Barton. “And, to me, (cloud HQ) feels like the future intuitively with all my Spidey sense.”

In fact, Barton said he feels he’s “inventing the future of work” at Zillow.  

“It’s like a little lab,” he said. “I am super intrigued. I love these kinds of disruptive changes that empower people.”

Barton has long championed his “power to the people” business thesis, arguing that companies he co-founded like Expedia, Glassdoor and Zillow opened the vault on previously hidden information. 

The cloud HQ concept is similar, in that regard. 

“This felt so obviously like a power to the people thing,” said Barton, adding that remote work allowed Zillow to “diversify the company geographically and on every axis.”  

“It turns out, a lot of people didn’t want to move to Seattle to get a job,” he said. “We get four times the number of applicants per job opening now as we did pre-COVID.”

Zillow’s diversity, retention, productivity and engagement metrics have increased with workers spread across the country, Barton said. 

To make sure employees are connected and cultural values are stressed, the company institutes week-long “Z retreats” once per quarter.

“We form a lot of those human bonds that are a little bit more difficult in Slack and Zoom,” he said. “And then we carry them with us back when we go to our offices.”

He added: “I think it’s working. But don’t tell anyone.”

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