JPMorgan Chase & Co. is often revered as the epitome of banking and finance. Its roots in New York City run deep. CEO Jamie Dimon is held in high regard by Wall Street, business professionals, regulators and the public.
It’s been reported by Bloomberg that after 200 hundred years of being a prominent part of Manhattan’s high-end establishment, the bank now plans to continue moving jobs out of the city. Over the last five-plus years, the bank has steadily and actively relocated thousands of workers to other locations within the United States, as well as moving jobs abroad. The company is now considering relocating several thousand more New York-based employees out of the area.
JPMorgan is seriously contemplating selling its investment banking headquarters, located at 383 Madison Ave., which currently houses the well-paid bankers and traders. Employees are concerned and worried about the company’s decision over which jobs will be selected for relocation. JPMorgan has already built up and staffed offices in lower-cost areas, such as Plano, Texas (where the bank now has 25,000 workers and is building a 12-story tower that will house even more employees), Columbus, Ohio and Wilmington, Delaware.
The new initiative will primarily impact non-client-facing workers. These employees are referred to in Wall Street jargon as back and middle-office professionals. These employees work in compliance, operations, trade support, accounting and human resources. Highly paid investment bankers and front-office executives that routinely meet with clients are expected to remain in the city. The bank, despite all of the moves, intends to keep a presence—albeit smaller footprint—in New York.
This is part of a larger, growing trend by banks to ruthlessly cut costs out of fear of a possible recession, concerns that the bull market may soon end (perhaps badly) and low interest rates, which cut deeply into profits. Real estate and salaries in New York are substantially higher than other parts of the country. Advances in technology make it easier to house employees in various locations around the world. There is no longer a need to cluster people in New York City.