JPMorgan Considers Moving Thousands Of Workers Out Of NYC To Prep For A Downturn
JPMorgan is planning to whittle down its New York City presence as it weighs moving thousands of employees elsewhere and possibly selling its Madison Avenue skyscraper.
The bank, the city’s largest private office tenant until it was usurped earlier this year by WeWork, is looking at moving thousands of employees to other parts of the country, Bloomberg reports. It is an attempt to cut costs amid a looming economic downturn, according to the publication.
The bank has committed to building a brand-new headquarters at 270 Park Ave., but has been quietly beefing up its operations around the country. Plans are already in place for hundreds of credit-risk jobs to be moved from New York to Texas, and for some senior-level employees to be moved to that state, too. Plus, some staff have already been told that New York will not continue to be a compliance hub.
Meanwhile, executives are reportedly weighing moving staff to places like Plano, Texas, Columbus, Ohio, and Wilmington, Delaware. It has more job openings in Texas than it does in New York, and hundreds of job listings in Wilmington.
Right now, JPMorgan has approximately 37,000 employees in the New York metro area, including New Jersey, according to Bloomberg.
The company’s New York City trading hub at 383 Madison Ave. could be sold as part of the cost-saving measures. There is no decision finalized on that yet, but what happens there, and how many people are moved to the new location on Park Avenue, will have an impact on how many people stay in the New York area.
“We are committed to the NYC metro area,” JPMorgan spokesman Joe Evangelisti told Bloomberg, adding that the new headquarters on Park Avenue will fit twice as many employees as the Madison Avenue building. “We expect [New York City] to be our largest location for the foreseeable future.”
There have been concerns about New York City’s business environment, political climate and affordability for some time now, which could result in loss of business and investment in the city.
JPMorgan wouldn’t be the first to begin withdrawing from the city; money manager AllianceBernstein announced earlier this year that it is moving its headquarters from New York City to Nashville as a cost-saving measure. It has been headquartered at 1345 Sixth Ave., but plans to move in 2022.
Back in February, Amazon killed its plans to open a new headquarters in Long Island City in the face of staunch opposition in some circles, raising concerns that New York City has become unappealing to business. (JPMorgan was also said to be hoping to hire from the talent pool that Amazon was expected to generate.)
In real estate, rent reform legislation, which reduced the ways landlords can increase rents on regulated apartments and de-stabilize units, is said to possibly put off investment into the city. Landlords also argue it will reduce the supply of quality housing in the long term, thereby driving costs up further for residents in the city.
Meanwhile, an ongoing housing affordability crisis means more than half of all households in the city are rent-burdened. Nearly 300 New Yorkers move out every day on average, a report found earlier this year, the highest number of any major U.S. metro.