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Tag: PwC

Return to uncertainty

In the wake of the Federal Reserve lowering interest rates by half a percentage point in September, the stock market has been setting records, hiring numbers are trending strong, and the inflation rate has been slowly edging downward.

Nevertheless, many businesses — and workers — seem to be in a state of anxious uncertainty, awaiting the outcome of this fall’s tight, bitterly waged presidential election, as well as any signals that may give them a better insight into the economic outlook for 2025.

As Virginia Business Associate Editor Beth JoJack examines in her November cover story, Vibe check, companies are also trying to get a read on whether their employees might be watching for the right time to jump ship — a prospect that for many employers sets off traumatic flashbacks of the pandemic’s Great Resignation era and its attendant labor crunches.

You’d do well to keep this question on your radar. After all, in PricewaterhouseCoopers’ 2024 Global Workforce Hopes & Fears Survey, released in June, 28% of employees surveyed responded that they would be “very or extremely likely” to switch employers over the next 12 months. That may not sound like a lot — until you hear that during the height of the Great Resignation, just 19% of workers surveyed gave a similar answer.

So, it was a tad surprising that Amazon.com chose this moment to hurl a metaphorical bomb into the labor pool’s presently murky waters.

In mid-September, Amazon CEO Andy Jassy sent a memo directing all corporate staff to return to the office five days a week as of Jan. 2, effectively eliminating all options for hybrid work schedules “outside of extenuating circumstances.” The global e-tail Goliath, which has its East Coast headquarters, Amazon HQ2, in Arlington County, previously required employees to work at least three days a week in the office.

Jassy, who said he is also seeking to streamline bureaucracy and flatten management structures, noted that prior to the pandemic, people didn’t have expectations of working remote or hybrid schedules. And he said that he wanted Amazon, which had about 415,000 corporate employees as of 2022, to function like a startup, fostering “fast decision-making, scrappiness and frugality, [and] deeply connected collaboration.”

Needless to say, a lot of experts have been weighing in with thoughts on this move. Some analysts, perhaps cynically, have wondered if it isn’t an effort by Amazon to cut staffing without having to instigate layoffs. There will, after all, inevitably be employees who choose to quit because of this RTO mandate. One question is, how many? Will it kick off a wave of “rage applications” to other jobs? And will Amazon lose an edge in attracting and retaining in-demand talent, particularly in emerging sectors such as artificial intelligence? Competitors like Google, Meta and OpenAI still offer hybrid work, and Microsoft execs have said they have no plans for strict RTO policies unless productivity falls off.

To be fair, Amazon isn’t the only big company taking a harder stance on return to office. JPMorgan Chase CEO Jamie Dimon has been critical of how remote work has created office building vacancies and has told Fortune that remote work harms “spontaneous idea generation” and is bad for team management. And in KPMG’s 2024 CEO Outlook survey, released in September, almost 80% of the 1,300 CEOs polled worldwide said they thought hybrid workers would return to full-time office schedules by 2027.

But even so, would eliminating remote and hybrid work be good for workers and productivity, or a step backward?

In September, PwC released its Workforce Radar Report, a 13-month study that surveyed more than 20,000 chief executives, HR professionals and employees. Its findings? “Hybrid workers have higher degrees of satisfaction and productivity than fully on-site [workers],” a PWC partner and workforce transformation leader, Anthony Abbatiello, summarized to Business Insider in September.

Quoting the PwC report, “The idea that being on-site all day every day is necessary to establish and sustain a strong culture is a myth. Don’t be afraid to offer flexible options for fear of diminishing it.”  

Data centers added $54.2B to Va. GDP over five years

The data center industry contributed $54.2 billion to Virginia’s gross domestic product from 2017 to 2021, according to a PricewaterhouseCoopers study released Tuesday.

That calculation includes indirect impacts from other businesses as part of the data center industry supply chain and induced impacts resulting from household spending of income earned from the industry or its supply chain. The study, commissioned by the Loudoun County-based Data Center Coalition, found that the data center industry supported 86,290 jobs in the state in 2021, up 32% from the 65,500 jobs it supported in 2017. In total for that five-year period, the industry contributed $31 billion in labor income. In terms of total employment, labor income and GDP impact, Virginia’s data center industry outpaces the sectors in Arizona and Ohio, which are also included in the study.

In 2017 alone, the data center industry contributed $8.9 billion to Virginia’s GDP, and in 2021, that number was $13.5 billion. Labor income contributions to the state similarly rose, from $5.05 billion to $7.9 billion. Arizona data centers, by contrast, contributed $8.5 billion to the state’s GDP in 2021, and Ohio’s industry contributed $4.3 billion to its state GDP in 2021.

From 2017 to 2021, the data center industry added a total $2.1 trillion to the national GDP, according to the study. In 2021 alone, data centers contributed $486 billion in economic impact, reflecting value added — the difference between the total revenue of the industry and the total cost of its materials, supplies and services purchased from other businesses.

In 2021, U.S. data centers directly and indirectly supported 3.5 million jobs, up from 2.9 million jobs in 2017, and $294 billion in labor income, an increase from $209 billion in 2017. From 2017 to 2021, the industry contributed a total $1.2 trillion in labor income.

Counting direct and indirect taxes, the industry generated $403.5 billion in federal, state and local taxes from 2017 to 2021. Total tax impact in 2021 was $99.6 billion, up from $66.2 billion in 2017.

Based on preliminary government data for 2022, the data center industry is estimated to have added more jobs in 2022 than it did over the 2017 to 2021 period, according to the study, supporting 560,000 direct jobs.

More than 70% of the world’s internet traffic comes through Data Center Alley — six square miles in Loudoun’s Ashburn area. In 2022, the region accounted for 64% of the total new data center capacity brought online in primary markets across the U.S., according to the North American Data Center Trends Report by CBRE.

While some communities have referred to data centers as game changers, they also are subject to criticisms for being loud, unsightly and large consumers of electricity. Prince William County Board Chair Ann Wheeler lost her primary bid in June over backlash to the controversial proposed Digital Gateway campus, which she supported, and some Northern Virginia-based state lawmakers have attempted to place limits on locating data centers near historic landmarks, although legislation failed earlier this year.

Between 2011 and 2021, Amazon invested $52 billion in building data centers in Virginia, and the e-commerce giant expects to spend $35 billion more on data centers in the commonwealth by 2040. 

The industry’s job-to-investment ratio is lower than other economic development categories, but the Northern Virginia Technology Council’s 2022 economic impact report concluded that for every job inside a Virginia data center, 4.1 additional jobs are supported in the rest of the Virginia economy.

Professional Services 2023: RUSSELL ‘RUSS’ MOORE

Moore has more than 25 years’ experience in providing auditing, accounting and advisory services to large private and public companies, particularly in the consumer and industrial products space. He became the head of Big Four accounting company PricewaterhouseCoopers’ Richmond market in 2018.

Moore joined PwC in 1997. Globally, the company has approximately 328,000 people working for a network of firms across 152 countries. PwC reported revenues of $50.3 billion for fiscal 2022. Its 191,000 clients include 84% of Fortune Global 500 companies.

Moore’s specialties include leading integrated audits and assisting in preparation of registration statements filed with the U.S. Securities and Exchange Commission (SEC).

He received a bachelor’s degree in economics and business from Virginia Military Institute and a master’s degree in accounting from the University of Virginia. Moore is also a 2012 Leadership Metro Richmond graduate. He sits on the board for the Boys & Girls Clubs of Metro Richmond, chairing its philanthropy committee, and he also serves on the University of Richmond Robins School of Business’ Executive Advisory Council.