Banks Shedding Real Estate in Moves to Cut Costs: WFH Tracker
Goldman Sachs Group Inc. has sent invitations to hundreds of senior staff to return to its London offices in recent weeks.
(Bloomberg) -- U.S. financial firms are abandoning some of their corporate offices to cut costs in response to the coronavirus pandemic.
Fifth Third Bancorp said Monday it will cut about 20% of its corporate office space as part of a plan to eliminate $200 million in annual expenses starting next year. Prudential Financial Inc. and Synchrony Financial said they’ll also reduce their real estate footprints as they keep their staff working from home.
“I think probably all of us are pleasantly surprised at how well it’s gone,” Synchrony Chief Executive Officer Margaret Keane said Monday at an investor conference. “We’ve made a decision to really accelerate that.”
Not every bank is finding the same success. At JPMorgan Chase & Co., younger employees’ productivity slipped, particularly on Mondays and Fridays, according to findings discussed by CEO Jamie Dimon in a private meeting with analysts at Keefe, Bruyette & Woods.
That’s why the biggest U.S. bank is urging more workers to return to offices over the coming weeks. The firm is requiring its most senior sales and trading employees to come back by Sept. 21.
“The WFH lifestyle seems to have impacted younger employees, and overall productivity and ‘creative combustion’ has taken a hit,” KBW’s Brian Kleinhanzl wrote in a Sept. 13 note to clients.
Here’s a variety of approaches that companies across the finance industry have announced.
Wells Fargo & Co.: The U.S. banking industry’s largest employer plans to keep most of its staff working from home through at least Nov. 1. The San Francisco-based lender said it has roughly 200,000 employees working from home and is maintaining safety measures in locations that remain open.
JPMorgan: The Wall Street firm has also asked half of its investment bankers to come into its London and New York offices each day under a rotation program. They will work from the office for one week at a time before swapping over. Daniel Pinto, CEO of the corporate and investment bank, said in a June interview he envisioned JPMorgan’s staff working in rotations with about a third logged on remotely at any time -- although it’s unlikely anyone will always work remotely.
Goldman Sachs Group Inc.: This month, the firm said it’s seeking to give every worker “who can do so an opportunity to come in to their office.” The firm is offering staff incentives such as free food, protective gear and access to an on-site nursery, although the return to the office is voluntary, Financial News reported Aug. 27.
Citigroup Inc.: This month, the firm began circulating a survey to employees to gauge interest in partially repopulating offices in the New York City region on Oct. 5. While the firm has currently reopened those offices to about 5% of staff, executives are looking to better understand what’s keeping people away.
Even if there’s strong interest, Citigroup will cap daily attendance at 30% for the time being, according to a person familiar with the matter who asked not to be identified discussing personnel information. And if fewer are willing to return, managers won’t pressure them.
American Express Co.: The card company began reopening offices in New York this month, with about 10% of workers opting to return in the initial phase, even as it told employees that they can continue working from home through June 2021 if they wish. The firm said it has reopened offices in 30 locations, mostly in Asia and Europe, after seeing infection rates remain consistently low.
Bank of New York Mellon Corp.: BNY Mellon has told the majority of its employees to continue working remotely for the rest of the year, postponing previous plans to have some staff return in September. About 96% of the bank’s roughly 48,000 employees have been working remotely since March. They’ll continue to do so until at least January, a spokeswoman said Aug. 26.
European Banks
Barclays Plc: The British lender has about 69,000 staff working remotely until at least the end of September. The bank plans to inform them individually when to come back, with return dates likely to span several months from October.
Still, the firm is making plans for the future of office life. Barclays is exploring a move to New York’s Hudson Yards as it looks for a smaller, more modern building with additional open spaces, a person familiar with the matter said.
Deutsche Bank AG: About a fifth of its London employees were invited back to the office this month, Financial News reported, up from 10% previously. The proportion of the German lender’s investment bankers who’ve returned to the office is far higher.
NatWest Group Plc: The U.K. lender said in July that 80% of its staff will continue to work remotely until 2021, extending its previous guidance that workers would be home until September. The decision affects about 50,000 people.
Schroders Plc: The London-based asset manager said in August it has “embraced flexible working permanently.” The change will make it easier for its workforce of nearly 5,000 to stay home when they need to, and will see less stringent requirements on the amount of time they need to be in the office or logged on to work systems, a company spokesman said. The change applies to all staff worldwide, but depends on their job responsibilities.
Danske Bank A/S: The Danish firm sent its employees back home in early September following a sudden spike in Covid-19 cases in the country. Danske said its decision will apply to the bank’s branches, as well as its call and finance centers.
Metro Bank Plc: After a survey of staff revealed that just 4% of those currently working from home want a return to the office full time, the bank is planning to allow staff to work above some branches.
“Alongside increased working from home, we envision back office colleagues working a couple of days a week in varied locations above our stores for the longer-term,” CEO Daniel Frumkin said in a statement. “We need to spend a little bit of money redesigning some of the space so it’s fit for purpose, for example with hot desking and collaboration spaces.” The lender isn’t expecting to return any of its workers to the office until next year.
Standard Life Aberdeen Plc: The Edinburgh-based firm said that while it plans to allow a small number of colleagues to return to the office in coming months, the majority will continue to work from home until at least the end of the year.
IG Group Holdings Plc: Staff won’t need to return to the office until next year, according to an Aug. 26 memo from the trading platform’s chief operating officer, Jon Noble. The company will review the decision in early 2021. Those who return will encounter one-way systems and fewer desks and meeting rooms. “You should expect that it will look and feel different,” Noble said in the memo.
Singapore Banks
DBS Group Holdings Ltd.: Singapore’s largest bank said about 70% of its local employees work from home. “While remote working has not affected short-term productivity, its long-term impact on customer journeys, experimentation and innovation is less clear. In addition, it is important to establish the impact of remote working on psychology and culture. We continue to work through what is the new optimal,” a spokesperson said in an emailed reply to questions.
Oversea-Chinese Banking Corp.: Singapore’s second-biggest lender doesn’t have a targeted percentage ratio of how many staff should work in the office, corporate security head Francisco John Celio said. Currently just under 60% of its employees work from the office. This number came from assessing the services, job functions and processes required to support business and consumer activities, the environmental risk due to Covid-19 and individual staff concerns such as medical or family circumstances, he said.
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With assistance from Bloomberg