Block Inc., the financial technology company formerly known as Square, has delisted San Francisco as its official headquarters marking its transition to what it characterizes as a “distributed work model.”
In a Feb. 24 regulatory filing, Block said it has supported a remote working model for years, but the pandemic rapidly accelerated that transition, leading it to remove its designated San Francisco headquarters location and giving most of its employees the option to work from home full time. A Block spokesperson confirmed that the company no longer has an official headquarters location.
“Whether it be from home, in an office, or a combination of the two, we are focused on providing our employees with more flexibility. This policy has unlocked opportunities to hire and retain talent in more locations, as many employees can continue to work for us if they need or want to relocate,” the company stated in the filing.
Block still has a significant office presence in the Bay Area, holding 469,000 square feet of space in San Francisco for product development, sales, marketing, and business operations under a lease that expires next year.
Of note, the company still lists its former headquarters at 1455 Market St., Suite 600 as the site to receive important notices or deliveries.
The company also leases 355,762 square feet of office space in Oakland’s Uptown Station development in a deal that expires in 2031. The company initially planned to occupy the office in 2020 before the pandemic led it to rethink its approach.
Social media company Twitter Inc., which was also founded by Jack Dorsey and has adopted a remote working policy that mirrors Block’s, still lists its 1355 Market St. office as its official headquarters. The company reopened its office on March 15.
According to its regulatory filings, Block employed around 8,500 people at the end of last year, with around 7,200 in the United States. A spokesperson refused to disclose how many of those workers are currently based in San Francisco.
The number of the company’s employees that are based in the city carries major implications for its local tax burden. Businesses in San Francisco are subject to a gross receipts tax, which is directly connected to the amount of business activity that takes place in the city.
A shift away from San Francisco could also potentially impact the company’s administrative office tax burden, which applies to companies with over 1,000 U.S. employees and more than $1 billion in combined gross receipts and where over 50% of the company’s total combined San Francisco payroll expense was dedicated to providing administrative or management services for the business.
San Francisco and Block have squared off over issues with the company’s tax burden in the past. The company filed suit against the city in 2019 to refund a portion of its tax bill, arguing that it should be classified as an information services firm rather than a financial services company. In 2020, San Francisco officials agreed to a partial settlement with the company and refunded it some $7 million. A subsequent lawsuit filed against the city netted an additional $2.6 million refund.
Block’s decision follows a trend of financial technology companies delisting their official San Francisco headquarters in favor of a remote-first model, like cryptocurrency exchange company Coinbase and credit card and financial services provider Brex.
Some members of banking’s old guard have also relaxed their approach to in-office work, with San Francisco-based Wells Fargo adopting a hybrid schedule for its corporate employees and reportedly marketing the office building it owns at 550 California St. On the other end of the spectrum is Bank of America which is following through with a five-day return-to-office plan in San Francisco.
In May 2020, Square announced that it would permanently continue its pandemic-era rules around working from home permanently meaning employees that can perform their job functions remotely could continue to do so forever. Last December, the company announced a corporate name change to Block, keeping its Square branding for its business targeting merchants.
Kevin Truong can be reached at [email protected]