WFH fails: why these 5 companies cancelled remote work

As management scholar and author of the book, How the Mighty Fall: and why Some Companies Never Give In, Jim Collins, says, it’s dangerous to study success.¹ Why? Because success stories are often told in hindsight with a clarity that the characters didn’t actually have while going through their journeys. They do inspire a sense of possibility and maybe even enthusiasm in the reader, but tell only half the story.

So, we’ve rounded up a list of companies—some well-publicized, some not so much—that have gone back on their WFH policies. Some of the reasons are predictable, and maybe you’ve probably heard them before. But some might surprise you.

In this post, we’ll cover five companies that cancelled remote working—and what we can learn from them:

• StatusPage: Remote work isn’t for everyone
• Yahoo: Less innovation
• Best Buy: “Too much freedom”
• RLM Public Relations: Work from home became slack off from home
• Reddit: Lack of coordination

Want to empower your team to work from anywhere successfully? Grab this free Work-from-Home (-or-Anywhere) Policy template!

1. StatusPage: Remote work isn’t for everyone

The fundamental determining factor of remote work success is whether your leadership and workforce are mentally (and practically) prepared for it.

Let’s face it. Working from home requires people to muster a sense of self-discipline and endurance for loneliness.

With the team at StatusPage—acquired by the same company that made Trello (which ironically powers many remote teams around the world)—neither the leaders nor the team felt that remote work was serving their creativity or the way they naturally communicated.

A couple of years ago, co-founder Steven Klein wrote on Reddit²: “… some people just aren’t wired for working remotely… For people who are used to and need to be around people to be happy, this can be an enormous problem. To be honest, I haven’t been myself and I haven’t truly been happy since leaving [his previous job], and I feel like it’s due to the isolation of working remotely.”

For Klein, technology and even the freedom to work out of coffeeshops were “poor replacements for normal human interaction.”³

Soon after this post, the company consolidated its team into two locations and ceased to be a fully remote company altogether.

What we can learn

Make sure to evaluate prospective hires rigorously for their suitability for working from home, and provide training to managers and employees to help them develop the necessary skills for remote work. Are they independent workers and self-starters? Do they have good communication techniques? Do they have experience freelancing or working remotely in previous jobs? Ask the right questions!

2. Yahoo!: Less innovation

Yahoo! was floundering when it suddenly withdrew its remote work policy in 2013, upheaving the lives of several hundred employees who were working from home full time. The situation was so bad that they were told to comply without exception—or quit.⁴

The internal memo by the then head of Human Resources, Jackie Reses, was leaked and made public, revealing (to put it mildly) a ham-fisted, disastrous decision, and an even worse memo. “Speed and quality are often sacrificed when we work from home,” the memo read. “And, for the rest of us who occasionally have to stay home for the cable guy, please use your best judgment in the spirit of collaboration.”

The memo was revealing of a severe erosion of trust in employees, which in itself is a killer of employee engagement, remote or not. Employees also anonymously reported that there was “little effort to stay in touch regularly.”⁵

In other words, Yahoo! didn’t have a handle on its communication and collaboration with remote employees. It also wasn’t clear whether they had a method of measuring these new productivity metrics either.

Technically, things didn’t really improve at Yahoo! after that.⁶ So was remote work really to blame? We’ll never know.

What we can learn

A remote company just can’t thrive without communication. Besides being the foundation of effective teamwork, communication also builds trust and empathy between employees and leaders. (Speaking of which, here are a few virtual team building activities to try.)

To avoid running into the problems Yahoo! faced, invest in a good collaboration hub or communication tool like RingCentral that’ll take care of your communication among company members and customers alike.

3. Best Buy: “Too much freedom”

One interesting thing about Best Buy is that it didn’t call remote work “remote work.” It called it a “Results-Oriented Work Environment (ROWE).” The focus is on the productivity and accomplishments of the employee and not their location or the number of hours they took. This program began in 2004.

Nine years later, Best Buy ended ROWE, saying it gave the employees “too much freedom.” Its then CEO, Hubert Joly, reportedly said that ROWE was fundamentally flawed from a leadership standpoint and that he wanted to restore accountability to the culture at Best Buy.^{7 8}

Much like Yahoo!, Best Buy was also struggling at the time and stated that it needed “all hands on deck.” It was a huge blow to remote working in general, considering that Best Buy’s ROWE was widely lauded and the subject of many case studies.

What we can learn

Best Buy was facing serious leadership and accountability issues—that would have been far harder to resolve than simply shutting a program like ROWE.

Had there been stronger leadership and commitment to improving employee morale and happiness, it wouldn’t have been too hard to revive productivity considering Best Buy’s positive history with remote work.

4. RLM Public Relations: Work from home became slack off from home

RLM Public Relations tried allowing its employees to work from home on Fridays, and it wasn’t long before CEO Richard Laermer began to regret it. Employees seemed to treat it like paid time off and would sometimes be away from the city and unavailable for emergency requests to come to the office during work hours. Response times slowed considerably and much like the team at StatusPage, he felt remote work wasn’t for him or his team.

His reasons are well-documented in an article he penned for NBC News.⁹ “Every weekend became a three-day holiday,” he’s quoted saying in the New York Times. “I found that people work so much better when they’re all in the same physical space.”¹⁰

What we can learn

Most of the problems Laermer described in his article are ones that could easily have been avoided with a solid work-from-home policy that set the rules for communication and collaboration in stone, even if employees were working from home just once a week.

5. Reddit: Lack of coordination

It was quite ironic that Reddit, which brings together people from all over the world, decided to do away with remote work two years after deciding to become a distributed organization.

It gave employees just two months to relocate to their office in San Francisco after the announcement was made.¹¹ All this, after extensive time spent on learning from distributed companies and trying to adopt the best video conferencing and remote working tools. Speaking of which, here’s a quick clip from our Remote Work Masterclass on the best remote work tools:

CEO Yishan Wong wrote on Quora “As it turns out, our teams (within each office) and remote workers did good work, but the separation has kept us from effectively being able to coordinate as well as we needed to on a full-company level. Big efforts that require quick action, deep understanding, and efficient coordination between people at multiple offices just don’t go as well as we (and our users) needed.”¹²

While Reddit remained productive in teams, Wong claimed that overall collaboration suffered. “There were too many times when we just needed to be able to walk over and tap someone on the shoulder and discuss a complex issue in-depth, right away.”

What we can learn

It’s always tough to replicate the kind of instantaneous feedback and chemistry of brainstorming in a room together with a team, or bouncing ideas off one another during a casual stroll by a colleague’s cubicle.

This is why some companies with completely remote workforces like Automattic organize at least one or two meetups a year, which are filled with both leisure and work.

The price companies pay for canceling remote work policies

Working from home isn’t right for everyone and certainly doesn’t have to be for you. But know that ending a remote work policy comes at a price. In almost all of the companies that revoked remote work, employees were left extremely upset. Whether the companies managed to turn things around or not, they created problems for their human resources teams that’ll take time to resolve.

To finish off with another quote by Jim Collins, “… Building a great company is not primarily a matter of circumstance, it’s a matter of choice and discipline.” We’d say that it’s the same with going remote.

It has its benefits, and in most cases, is worth trying it out. But it’s not a matter of “either it works or it doesn’t.” Sometimes it takes a few adjustments and maybe the introduction of new tools and processes to really smooth things over. Ultimately, it’s up to those at the helm to commit to the decision with the intention of seeing success. Are you ready to commit to remote work?

Originally published Jul 14, 2020, updated Jun 24, 2021