Commercial Real Estate

Snowflake CEO says Covid has shown old approach to working at the office is 'nonsense'

Key Points
  • "This whole notion that the office is your workday home, we realize that is nonsense," Snowflake CEO Frank Slootman told CNBC.
  • "It's really going to reduce the real estate footprint that companies have," the longtime tech executive added.

In this article

Snowflake CEO on his 2021 cloud outlook
Snowflake CEO on his 2021 cloud outlook

Snowflake CEO Frank Slootman told CNBC on Tuesday he believes the coronavirus pandemic has fundamentally altered the role that physical offices will play for corporations going forward.

"This whole notion that the office is your workday home, we realize that is nonsense," Slootman said on "Squawk Alley." "Offices ... need to be there for specific purposes — for events, for training, for meetings, specifically — but not a place to hang out 9 to 5. That's definitely changing. It's really going to reduce the real estate footprint that companies have."

The advent of the Covid-19 outbreak last spring ushered in widespread remote work for many white-collar employees that has continued for months. It has proven to be "almost like a wake-up call that is just opening our eyes to the opportunity," said Slootman, a longtime tech executive who in 2019 took over at Snowflake, a cloud database company. It went public in a massive IPO in September.

Snowflake and other cloud companies are beneficiaries of the shift to remote work. For example, Amazon Web Services CEO Andy Jassy told CNBC in December he believes "the pandemic will have accelerated cloud adoption in the enterprise by a few years."

Slootman said he understands people might be eager to more freely leave their homes once long-standing public health restrictions are eased, potentially wanting to return to pre-pandemic routines of commutes. However, he said his San Mateo, California-based company does "not have a yearning to go back to where we were." Slootman added, "From a business standpoint, there's a lot of positives to the shock to the system that we received."

One positive could be the ability to recruit potential employees from a larger geographic region. Indeed, Okta co-founder and CEO Todd McKinnon said "a war for talent" that is being fought beyond just Silicon Valley helped catalyze the company's embrace of remote work. "And the more broadly we can appeal to people, in terms of letting them work from anywhere and ... letting them contribute at a high level from anywhere, that's our plan," McKinnon told CNBC last month.

Slootman also pointed to companies such as Oracle, which is moving its headquarters from California to Texas, as evidence of how the coronavirus pandemic is recalibrating approaches to work. In announcing its decision, Oracle referenced its implementation of a more flexible work policy.

"The whole notion of a headquarters is pretty much evaporating in front of our eyes," said Slootman, who previously was president and CEO of ServiceNow from 2011 to 2017. "We're no longer operating with a physical center of the universe. We're completely virtual. We're connecting as needed, and we've been operating for the better part of a full year without headquarters and it's just fine. ... It's just a concept whose time has gone away, and that's very profound."

To be sure, the pandemic's long-term impact on the office is not yet known and some companies have indicated permanent remote working is not in their future. For example, while Google has delayed its employees' return to work date to Sept. 1, CEO Sundar Pichai wrote in a company email last month that they will eventually be expected to work in person for at least three days per week.