Dimon started dropping clues about the bank’s location shift at the annual meeting -- held in Plano -- last year.
“There are more JPMorgan Chase employees in Texas than any other state outside of New York,” he said. “I’m sure it will be No. 1 soon.”
High Taxes
The moves are a response to a variety of forces that weigh on companies doing business in New York, including high taxes and expensive real estate. JPMorgan is also making good on a threat to move jobs out of the city after Mayor Bill de Blasio’s administration in 2014 rejected the bank’s demands for as much as $1 billion in tax breaks and cash to keep employees in New York. Dimon said privately in the years after the financial crisis he didn’t think New York politicians stood up for one of the region’s biggest industries.
The collapse of the Amazon deal also hurt one of the arguments for keeping more employees in New York, according to people briefed on the plans. Executives had hoped Amazon’s arrival would lure more tech-savvy workers to the area, with JPMorgan planning to draw from the same pool to add to its 50,000 tech staffers, said the people.
“Location strategy is not simply about costs,” Evangelisti said “We build in places to be close to local talent such as Palo Alto, to better serve clients and for business resiliency reasons.”
New Headquarters
Discussions about JPMorgan’s overall location strategy remain fluid, and the bank doesn’t yet have a final tally on how many employees it will keep in New York. One person with knowledge of the talks said the decisions hinge on how many people the bank decides to put at its new headquarters, and whether the bank decides to sell 383 Madison, which was picked up in the fire-sale purchase of Bear Stearns Cos. in 2008 and is serving as a temporary staging area for executives while 270 Park is dismantled. JPMorgan has not yet determined what to do with 383 Madison, and any decision may be years away.
The discussions are affecting hiring decisions, with some teams being told to restrict their searches for new hires to candidates already based in lower-cost locations, some of the people said. Already, the firm has more job openings in Texas than it does in New York, New Jersey and Connecticut combined, according to listings on its website.
Cheap housing and the absence of a state income tax have made Texas popular with workers, while low corporate taxes and a reputation for a pro-business regulatory environment have persuaded large employers to relocate. JPMorgan struck a deal with the city of Plano in 2016 to relocate 4,800 employees to the area in exchange for a $4.9 million economic grant and a temporary tax abatement.
For JPMorgan employees, a move comes with some perks. In New York’s Tribeca neighborhood, $1.05 million will get you a 605-square-foot, one-bedroom apartment with an open kitchen, windowless bathroom and shared roof deck. In Plano, the same price gets you a 5,684-square-foot home with five bedrooms, six bathrooms, a 400-bottle wine room, a covered patio with wood-burning fireplace and a combined pool and spa.
Vintage Dimon
In some ways, it’s vintage Jamie Dimon. He built JPMorgan into the most profitable lender in banking history by being a sober risk manager with a penchant for cutting costs to defend the company’s “fortress balance sheet.” And JPMorgan is tightening its belt more than in previous years amid a growing number of potential pitfalls for the economy.