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On the money

Have snazzy offices had their day?

Apple’s $5bn headquarters in California. Sam Hall/Bloomberg

From the Chrysler Building and Sears Tower to the Bank of China’s towering Hong Kong headquarters, companies have always erected monuments to their success. Yet it’s strange, says The Economist, to see how much the big Silicon Valley tech companies – “whose avowed goal is to digitise all of life” – pride themselves on their magnificent HQs. Uber’s new San Francisco digs reportedly cost $130m to build, Salesforce is paying the developer of Salesforce Tower nearly $560m over 15 years to lease 30 of its 61 floors, and Apple’s spaceship-like base in Cupertino cost $5bn, a whopping $385,000 per employee.

There are reasons beyond self-aggrandisement to covet posh quarters. Fancy workplaces attract employees, spur teamwork – indispensable to innovation – and imbue a sense of corporate mission. But long commutes and cloud computing were making tech temples seem anachronistic before Covid-19, and the pandemic is changing the contours of California’s corporate HQs. Most new ones will be smaller, others will look different, with more space for socialising and collaboration, while the most radical companies will do away with headquarters altogether – becoming, in the jargon, fully “distributed”.

Snowflake, a data-management firm, now only maintains an “executive office” in Bozeman, Montana, its centre of gravity having shifted to local offices around the world. Coinbase, a cryptocurrency exchange, will shut its head office in San Francisco next year. More firms will hire remote workers outside their California heartland or follow Oracle and Tesla to cheaper, less congested, lower-tax jurisdictions such as Texas or Florida. “Silicon Valley will persist, though perhaps less as a place and more as a global network”.

Spare us the holier-than-thou act

It’s become commonplace to contrast “the piety of the modern corporation” with its elaborate tax schemes, says Janan Ganesh in the FT. In fact, multinationals speak “the argot of the cultural left” precisely to hide how much they’re “stiffing the taxman”. Look at Coca-Cola’s 2020 environmental, social and governance report – it’s an 82-page apology for itself. But that hasn’t stopped the company having “fiscal issues with the feds”.

If we want to rid ourselves of “the simpering corporation”, higher and better-enforced taxes are the answer. The G7 summit got that right at least. They would allow businesses to ditch the holier-than-thou act and get on with making a more honest buck. What’s more, their employees wouldn’t be forced into “pastoral communion” with them.

The creepiest firms are those such as Coca-Cola, which says it wants its US workforce to “align with” ethnic census data, and Microsoft, which demands immigration reform, better humanitarian crisis response and “alternatives to incarceration”. These “corporate social reform” missions read like the bill of rights of a nation state. Guff like this is wrong-headed because it ignores everything that gives a business value: job creation, innovation, consumer choice. And it does capitalism a huge disservice in the long run. Proper taxation is the way out. That sounds expensive, but it’s actually a bargain. “Render unto Caesar what is Caesar’s.”

The quarantine quandary  

The perfidious French are at it again. There was “consternation in Whitehall” this week after President Macron rolled out the red carpet in Paris for JP Morgan boss Jamie Dimon, who snubbed the UK because of its strict travel rules, says the Telegraph. As a result of this debacle, executives jetting into Britain for important meetings will no longer need to spend 10 days quarantining in a hotel. But there’s a caveat: a trip must bring “significant economic benefit” to the economy, meaning that there has to be a greater than 50% chance of the visit creating or protecting at least 500 UK-based jobs.

The loosening of the travel rules provoked criticism from small businesses, the travel industry and opposition MPs, with Labour calling the waiver for bankers an “offensive slap in the face” for families.