JPMorgan Chase & Co.’s new Manhattan headquarters is meant to be an ode to both the company and the city -- a monumental glass-and-steel tower that says the nation’s largest bank grew up here. But New York may be losing its luster.
Despite more than two centuries of history in a city synonymous with the global financial industry, JPMorgan is quietly shrinking its workforce there. The bank’s been building up its presence in other locations and is now considering relocating several thousand New York-based employees out of the area to help rein in costs ahead of a possible economic downturn, according to people with knowledge of the bank’s strategy.
One option is to sell the investment-banking headquarters, at 383 Madison Ave., long the main hub for JPMorgan’s bankers and traders. Executives are deciding what roles could be relocated to lower-cost hubs such as Plano, Texas; Columbus, Ohio; and Wilmington, Delaware. In the investment bank and asset-management group, the moves will primarily affect non-client-facing workers, but could also impact junior-level investment bankers, some of the people said.
JPMorgan spokesman Joe Evangelisti said the bank believes it’s healthy to continually review its facilities and where employees are based, and that the new headquarters will house twice as many employees as the old tower did.
“We are committed to the NYC metro area,” he said. “We expect it to be our largest location for the foreseeable future.”
JPMorgan has already made plans to move hundreds of New York-based credit-risk jobs to Texas and to station some senior-level employees of the consumer bank there, according to people with knowledge of the matter. JPMorgan also has told some staff that the New York region will no longer be a hub for compliance.
The moves mark a new era for JPMorgan, which has helped companies and governments raise capital from its New York perch under 61 mayors -- and once even bailed the city out of a fiscal crisis. For New York, it’s the latest retrenchment by a financial institution and another black eye after online retail giant Amazon.com Inc. in February canceled plans to place its second headquarters in the city, undermining New York’s quest to transform itself into an East Coast alternative to California’s Silicon Valley.
Banks Decamp
Big banks and money managers have been moving employees away from New York and its surroundings to cheaper U.S. cities for years. Goldman Sachs Group Inc. has built up operations in Salt Lake City, Deutsche Bank AG has expanded in Jacksonville, Florida, and AllianceBernstein Holding LP last year announced plans to move its corporate headquarters to Nashville, Tennessee.
But JPMorgan had seemed to buck the trend: Chief Executive Officer Jamie Dimon said last year the bank was “recommitting ourselves to New York City” as it announced plans to build a new headquarters at 270 Park Ave. A year earlier, it committed to more than tripling the size of its technology hub on the west side of Manhattan. Some of the focus was not on only New York but the wider area: in 2015, the bank made an agreement with Jersey City, New Jersey, to move more than 2,000 information-technology jobs across the Hudson River.
Still, it’s quietly accelerated the buildup of a new base in the Dallas suburb of Plano. The bank already has 25,000 workers in Texas and started construction this summer on a 12-story tower that will house about 4,000 employees, increasing its total employment in the state.