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April 9, 2021

Raytheon CEO: Company could shrink office space by 25%; hybrid work environment way of the future

Contributed Gregory Hayes,

Raytheon Technologies CEO Gregory J. Hayes said he can see eliminating up to 25% of the conglomerate’s 32 million square feet of office space due to changes in work habits brought on by the COVID-19 pandemic.

“The office has changed,” Hayes said Wednesday during a live-streamed virtual interview with Carlyle Group co-founder David Rubenstein for The Economic Club of Washington, D.C.

Noting that he hasn’t had an in-person board meeting or staff meeting since the former United Technologies Corp. and Raytheon Co. merged to form Raytheon Technologies one year ago, Hayes said telecommuting will be the way of the future.

“We have 32 million square feet of office space out there,” he said. “I think we’ll eliminate 25% of that in the next couple of years and people will have a hybrid working environment. They’ll be in the office a day or two a week, then they’ll be working remotely.”

In contrast to numerous other Fortune 500 CEOs — who have been eager to lure vaccinated employees back to the office with new safety protocols and enhanced support services — Hayes said the work-from-home model, while “not perfect,” has undeniable benefits.

“The efficiency of [remote work] is phenomenal,” he said. “No commute, just the ability to focus on work and get things done. Most people I think enjoy the remote work-life balance.”

Hayes did not say where or in what market the company would eventually seek to scale back its commercial footprint, but it occupies plenty of office space in Connecticut, particularly in Farmington where it was previously headquartered.

Raytheon owns nearly 300,000 square feet of office space in that town in three buildings at 1 Carrier Place, 1 Farms Spring Road, 4 Farm Springs Road, town records show. 

Photo | CoStar
1 Farm Springs Road in Farmington, owned by Raytheon Technologies Co.

Meantime, its jet-engine making subsidiary Pratt & Whitney is headquartered in East Hartford. Reductions at any of those locations would most likely result in reduced economic activity for surrounding communities and a loss of property taxes paid to municipal governments.

When asked about the company’s long-term prospects, Hayes said several factors, including an expected rebound in commercial air travel and a $70 billion backlog of defense projects, make him optimistic.

“We’ve got a good hand here for the recovery that’s coming,” he said.


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