Why Overstock’s CEO won’t sell its flashy $100 million HQ despite a majority remote staff
In October 2016, Overstock.com inaugurated its $100 million state-of-the-art home office near Salt Lake City. The 230,000-square-foot building resembles the Roman Colosseum, with open air space on the ground floor and the kind of amenities—juice and coffee bar, game room, medical clinic, cafeteria—that today’s tech workers have come to expect.
“Before the pandemic, it was our best recruiting tool,” Jonathan Johnson, CEO of the discount home goods online retailer, tells Fortune. These days, tumbleweeds are practically rolling through the building.
Just a few dozen of Overstock’s 1,350 employees regularly come to the office. The vast majority opts to work from home even as the pandemic eases, and top executives come to the office only for an in-person huddle on Wednesdays. Other than those weekly meetings, and about 50 or so Overstock employees who come in daily, the building is solely used to house sporadic “homecoming celebrations,” which are essentially company retreats.
Johnson is fine with this return-to-work setup and the building’s minimal use, going as far as to give Overstock’s new office framework a catchy acronym: FORWARD, for “future of remote work and re-entry design.”
Yet despite the building’s low usage and a geographically dispersed staff, Johnson has no plans to sell the facility, even if office attendance never returns to pre-pandemic levels.
“Two years from now, as we get together for our homecoming celebrations, employees may realize they like being around people and want more in-office interactions,” he says. Johnson’s decision to retain the “coliseum” is admittedly made easier by the dampened commercial real estate market, although he recently received an offer to convert the space into condos. “But I’m in no rush to sell it,” he says, while conceding that he could revisit the idea in two years if employees overwhelmingly choose to work from home en masse most days.
The company’s financial report may explain why Johnson isn’t mandating that employees return: 2021 revenue rose 11% from $2.5 billion to $2.8 billion, as homebound customers redecorated their quarantine abodes.
While the building is designed to accommodate up to 5,000 workers, it is unlikely to reach full occupancy anytime soon. Most employees say they want to work from home, according to internal employee surveys, and it’s not the just the rank and file either; Johnson recalls his chief technology officer stating that he never again wants a job that requires a daily commute to the office. What’s more, the company’s chief supply-chain officer lives in Texas, its newly hired marketing chief is based in California, and the head of investor relations is in New York.
As companies turn away from the traditional model of daily commutes to a central corporate HQ, many are cutting office space as a cost-saving measure. Still others, notably companies including Walmart and Goldman Sachs and tech companies like Meta and Apple, are betting that offices are still optimal, with some spending fortunes on new facilities or expanding existing ones.
Overstock’s attraction to remote work can also be attributed to the tight labor market in Utah, where 90% of Overstock’s staff resides and where unemployment is around 2%. Companies have to be accommodating of their staff’s wants in order to retain them, Johnson admits. “The workforce has the upper hand today.”
At the same time, Utah’s tight labor market is prompting Overstock to cast a much wider geographical net when recruiting, especially for tech talent. Employees can now be found in 22 states compared to five just a few years ago.
Cultural balm after ex-CEO earthquake
The pandemic hasn’t been the only disruption to Overstock’s business. A year prior, in August 2019, Johnson took the reins after its founder and CEO, Patrick Byrne, made a litany of conspiracy claims and abruptly exited the company. Byrne disclosed his supposed role in the “deep state,” involvement in a federal investigation into the 2016 election, and alleged that he had had an affair with a Russian agent who has since been deported after serving jail time.
The media firestorm rattled staff and created a sense of instability at a time when the company’s financial health was in question. Johnson, who had been at Overstock since 2002, first overseeing its retail business and then a crypto project that was soon spun off, sought to quiet the troops and flatten the corporate structure.
That included a more collaborative approach to top decision-making, an approach that was harder to implement under Byrne. “We had had a founder-CEO for two decades, and founder-CEOs tend to be decision-makers,” says Johnson, indirectly characterizing a culture in which even executives felt they had to tread carefully.
Soon after he became CEO, Johnson noticed colleagues instinctively turned to him in meetings to gauge his reaction before piping up. “I don’t want to be a micromanager,” he says, preferring to empower executives to make their own decisions. “Intent-based leadership is to give clarity about your objective, get smart and competent people, and give them control,” he says.
To that end, Overstock spent a year refining its values and mission statement. The company has won kudos locally for having women in several top jobs, including its CFO, CMO, CPO, and chief customer officer, and it named a diversity and inclusion leader, Sandra Bushby, in early 2021.
Overstock has also long sponsored the Salt Lake City gay pride parade with little blowback, which may come as a surprise for a company based in a Republican-leaning state. Indeed, the soft-spoken Johnson took a leave from the company in 2016 to run as a Republican in Utah’s gubernatorial race, but he prefers as CEO to keep politics and the office hermetically sealed off from one another. “I never wanted my political views to seep into the company,” Johnson says.
Instead, he wants to focus on building the culture Overstock needs to thrive in the e-commerce era, saying, “I think it surprised a lot of people that we would have this kind of culture.”
Never miss a story: Follow your favorite topics and authors to get a personalized email with the journalism that matters most to you.