We examine how remote work affects firm productivity and employment outcomes. Using an instrumental variables design based on pre-pandemic occupational remote work suitability, we find that remote work increases the productivity of startups while reducing productivity for established firms. This effect operates partially through labor market scaling: remote startups experience substantially higher hiring rates, overcoming geographical hiring constraints for talent acquisition. Our findings suggest that remote work alleviates a key disadvantage that young firms face in hiring and expanding, while established firms experience challenges in adopting remote working practices.