Deutsche Financial institution might transfer half of its New York workforce to a different location
The Frankfurt-based bank will vacate its 60 Wall Street office for its new headquarters on Columbus Circle in Manhattan. Photo: Tolga Akmen / AFP via Getty Images
Deutsche Bank AG (DB) could move half of its 4,600 employees in New York to other smaller US centers in the next five years.
The managing director of the German investment bank for the US told the Financial Times that the coronavirus pandemic, which left many employees working from home, “taught us a ton”.
Christiana Riley said employees who had effectively worked from home for the past nine months due to COVID-19 neutralized the previously “fierce battles” over whether jobs could be sent to lower-cost hubs.
The number of employees could “conceivably” be halved within five years, depending on the development of “smaller hubs and pockets”. she told the FT.
Riley, who also holds a position on the lender’s board of directors, added that she expects other banks to follow similar trends if work patterns change due to the pandemic.
She expects banks to “focus their workforce on various low-cost areas in the US” rather than following the model of some tech companies that allow employees to work essentially from anywhere.
“I’m optimistic that New York will remain a hub to some extent,” Riley told the FT. She added, “You will continue to have significant amounts of institutional capital in and around New York … but that may not be relevant to all of these people.”
The bank already has employees in the Americas based outside of New York, including around 2,000 employees in areas such as human resources, compliance and risk in Jacksonville, Florida. The German employs 600 people in a technology center in Cary, North Carolina.
The Frankfurt-based bank will vacate its 60 Wall Street office for its new headquarters on Columbus Circle in Manhattan.
Last week it announced that it expects to cut its adjusted costs by EUR 300 million (£ 363.275 million) more than previously announced for 2022, partly due to the impact of COVID-19 on work habits.
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The German is in line with other large banks, where companies will adjust the work trends and office work in the future.
Other big names have also hinted that they could move employees outside of expensive financial centers.
Goldman Sachs (GS), a staunch Wall Street employee, is reportedly considering moving a number of wealth management jobs to Florida as part of a broader plan to cut costs.
Meanwhile, US lender bank JP Morgan (JPM), which has 19,000 employees in the UK, has raised concerns about the impact of remote working, including the lack of mentoring for young workers and a small drop in productivity on Mondays and Fridays. Nonetheless, JP expects that up to 30% of the approximately 257,000 employees worldwide will work from home at least part of the time.
Similarly, in the UK, banks, accounting firms and other companies have revamped their work habits in the face of the pandemic, planning many to sell office space.
Earlier this month, Lloyds Banking Group (LLOY.L) announced that it would be converting 700 full-time workers from home in 2021 despite the UK approving a COVID-19 vaccine. Due to the pandemic, 50,000 of the 65,000 employees are already working from home.
NatWest (NWG.L) has announced that 50,000 of its around 60,000 employees will continue to work from home at least until April 2021 in order to be able to work more flexibly.
Barclays (BARC.L) also announced that it is reviewing the amount of office space used after 30,000 of its 50,000 employees are effectively working from home.
Other banks, including Standard Chartered (STAN.L), are also permanently switching to flexible working after a cross-bank review of all locations where 80% of the entire company was found is suitable for “hybrid” work.
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