When I first moved to Chicago I worked from home 90% of the time. I found it a very isolating situation. My life in Chicago really blossomed once I began freelancing and had to go into an office on a regular basis. I met an office full of - and made friends with - dynamic, hilarious people. It was a life lesson around how I prefer to work. That being said, these days I work from home one or two days a month. It has it's advantages, especially when I need to concentrate on a single task.
A couple of of my most effective colleagues have almost the exact opposite schedule. One works exclusively from his home and comes in a couple of times a quarter. The other works remotely from her home and is only in the office a couple of times a month. She and I connect almost every day, however - via skype in meetings, over email or just liking each other's updates on facebook (Hi Alexis!)
A lot of industry chatter is implying that this may be a back door lay off, since it's conceivable that employees who work remotely now will choose to find work with other, more flexible, companies versus being forced to come into the office. While this may help to avoid layoffs at Yahoo, it will also lead to a serious loss of talent. Productivity has very little to do with where you are working from. A number of Yahoo's competitors have even used this announcement as a recruiting tool.
I guess when push comes to shove, I would rather have happy, productive employees who want to come in versus unmotivated "butts in seats" using company time to update their resumes.
Where do you fall in this debate?