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Melville firm to cut office space 85%, eliminate some jobs

MSC Industrial Direct Co. CEO Erik Gershwind says

MSC Industrial Direct Co. CEO Erik Gershwind says the firm's employees have responded well to the work-from-home model. He is pictured in 2016. Credit: Barry Sloan

MSC Industrial Direct Co. is shrinking its Melville headquarters by 85% because of the success it's had with a home-based workforce, executives said.

The distributor of industrial supplies plans to sell its corporate office and customer support center at 75 Maxess Rd., which is 170,000 square feet, and rent 26,000 square feet at nearby 515 Broad Hollow Rd., also in Melville.

As a result of moving to a smaller building, the company expects "several positions" related to operating the Maxess Road facility will be eliminated, said Paul Mason, a spokesman for MSC, which is one of Long Island’s largest public companies.

Mason said MSC has 370 employees and 60 contractors assigned to the Maxess Road office. No decisions have been made about a sister facility in Davidson, North Carolina, he said last week.

MSC’s worldwide payroll totaled more than 6,300 people as of August, according to a securities filing.

In terms of the Melville operation, CEO Erik Gershwind said, "We have been impressed by the flexibility and productivity that our associates have displayed while working remotely and they have indicated they prefer the flexibility and work-life balance that working from home provides them."

He continued, "We do not envision going back to a pre-virus environment. We expect to take a hybrid approach, with many associates continuing to work remotely while providing limited access to our facilities for those occasions in which they need to be in the office."

The new Melville office will have an open floor plan and conference rooms. Employees will use a mobile app to reserve a desk or meeting room, Gershwind said, adding he hopes the work-from-home regimen will assist in hiring and retaining employees.

MSC is among a growing list of employers to embrace smaller offices, though few are selling their buildings outright.

The amount of office space available for sublease in Nassau and Suffolk counties has increased at least 22% compared with last year, according to CoStar, an international commercial real estate analytics business.

The companies seeking tenants include food manufacturer Hain Celestial Group, car-dealer software provider Dealertrack, Integra Managed Care, Professional Physical Therapy and Newsday.

Newsday is seeking to sublease 40,000 square feet, or just under one-third of its footprint, spokeswoman Kim Como said.

"Given the current climate, and with most of our staff working remotely, Newsday is looking into subletting the third floor of 8 Corporate Center Drive" in Melville, Como said in an email. "Our business has continued to operate smoothly during the pandemic."

The coronavirus pandemic is leading many employers to reconsider the role of brick-and-mortar offices – but not to get rid of them, experts said.

"The bigger employers are recognizing and acknowledging the challenges of operating in a purely remote setting," said John Williams, president of the Federal Reserve Bank of New York. "Most business leaders are thinking the future is a hybrid model, where people are still coming into the office on a regular basis but maybe not Monday through Friday, 9 to 5. … Human beings work very effectively collaborating and innovating when they're together," he said last week during a virtual event with journalists.

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