Raytheon plans to cut office space by 25% as it embraces hybrid work

Raytheon Technologies is embracing the hybrid work model as a means to reduce its footprint and foster a more inclusive workforce, CEO Greg Hayes told CNBC Tuesday.

After more than a year of working from home, an experiment spurred by the Covid-19 pandemic, the company plans to cut a quarter of its office space and welcome employees to the office only when necessary.

“What this pandemic has shown us in all honestly is that, you know, you can be productive in varying work environments,” he said in an interview with Jim Cramer on “Mad Money.”

Raytheon, which reported having 181,000 employees globally as of December, said about 100,000 people have worked remotely during the pandemic. Raytheon is looking at reducing its 32 million square feet of space by 25%, or 8 million square feet.

That won’t spell the end of in-person work activities at Raytheon, an aerospace and defense giant based in Waltham, Massachusetts. Hayes sees bringing workers in as an opportunity to maintain company culture but noted a benefit in doing away with daily travel to campus.

“I still think you have to be in the office occasionally,” he said. “You have to build social capital, you have to build that team esprit de corps, but you don’t have to have an hour commute every single day to be productive.”

Raytheon also has its focus on reaching diversity goals, and Hayes thinks a work-from-anywhere model will be key in supplying the balance between work and family life that many women demand.

During the pandemic, the rate of women’s labor force participation fell to levels not seen in decades.

“We’re going to give people flexibility and that’s going to help a lot in terms of retention as well,” Haye said. “As I think about the goals that we have around diversity and trying to keep young women in the workforce, this type of flexibility is absolutely essential.”

Raytheon stock declined 1.37% on Tuesday to an $85.38 close. The stock has climbed 19% this year.