P
ProHub
English 简体中文 繁體中文
Hard Cost Savings Change Management Real Estate Optimization

Hybrid Work Model

#Entertainment #Television Production
ProHub Comment

This case tests the candidate's ability to balance quantitative analysis with qualitative judgment and pushback against client assumptions. The core challenge is recognizing that while headline rent savings appear significant ($740k annually), once implementation costs and lease breakage are factored in, the deal becomes cash-negative over the CEO's stated 2-year timeframe—requiring candidates to challenge the CEO's premise and introduce strategic benefits (talent acquisition, hiring competitiveness) from market data to justify the move anyway.

Estimated Time 15 minutes
Difficulty Hard
Source NYU
50 / 100
You’ve been called into the headquarters of Galloway Entertainment, a small television production company in New York. The company carefully managed employee interactions during the pandemic, and as a result was able to get through without making significant operational changes. However, the CEO has been reading up on the new ‘hybrid work model’ and is excited by the opportunity to consolidate her real estate footprint and generate what she expects will be significant near-term operational efficiencies. Her team has pulled together an initial estimate of what it will take to enable a hybrid workplace, and she has asked you to evaluate whether she should pull the trigger.

Clarifying Information

  1. A hybrid work model describes an environment in which employees spend some, but not all of their time, in the office
  2. Galloway Entertainment produces scripted television and is exploring getting into documentary filmmaking
  3. Galloway makes money by licensing its content to cable television companies and online streaming platforms
  4. Galloway films in multiple locations across the US
  5. Operations are currently in New York City, NY, in an office a few blocks away from the CEO’s apartment
  6. The CEO’s primary focus is making decisions that are cash-neutral or better over a two-year timeframe
  7. The company’s lease is up in three years. If they want to move, they need to break the lease
  8. Lease Breakage Cost: 50% of remaining lease value
  9. Moving Costs (One Time): $250,000
  10. New technology enabling remote work: $500,000 implementation cost plus $250,000 annual license
  11. The company plans to move their server room offsite, and has found a 1,000 sf location in New Jersey that costs $5 per square foot per month