Wall Streeters outpace Europeans back to office
LONDON, June 7 (Reuters Breakingviews) - American banks could steal another march on their European rivals. JPMorgan (JPM.N) Chief Executive Jamie Dimon and Goldman Sachs’ (GS.N) David Solomon want staff back at their New York and City of London desks at least some of the time this summer. Barclays (BARC.L), Deutsche Bank (DBKGn.DE) and HSBC (HSBA.L), (0005.HK) are being laxer. Sidewalk-pounding bankers working at Wall Street firms might win more facetime with clients, and an even greater share of deals.
Dimon reckons working from home isn’t suitable for those who want to “hustle”. Perhaps that’s why his bankers in the United States and Britain are expected to trudge back into their Manhattan and Canary Wharf offices this summer, subject to a 50% occupancy cap. Goldman’s Solomon has given a similar timetable to staff on both sides of the Atlantic, and has called remote working an “aberration”. Compare that with Barclays, HSBC and Deutsche Bank. The first two have yet to issue an edict on the matter, while Deutsche’s U.S. investment bankers are only expected in by September.
One possible explanation is that the region’s lowly valued, high-cost banks spy a chance to cut costs by embracing more remote work. HSBC CEO Noel Quinn reckons the bank can slash 40% of its physical office space over time. Barclays’ Jes Staley said last year that “putting 7,000 people in the building may be a thing of the past”, though he has more recently talked up the benefits of office working for collaboration and corporate culture.
The Europeans may find that any savings also come with a cost. M&A and capital markets bankers admittedly made out handsomely by pitching deals from the kitchen last year. But that was when everyone was in the same boat. Dimon and Solomon’s staff may now find themselves at an advantage as their offices fill up: colleagues can quickly share ideas or deal gossip; more frequent face-to-face meetings with clients help to build trust.
The difference may be slight, but JPMorgan and Goldman already have the momentum. Their joint share of global M&A fees rose to 19% from 18% over the last five years, using Citigroup’s data, compared with a slump to 5% from 7% for Barclays, Deutsche and HSBC. A little extra hustle from the Americans could result in an even bigger gap.
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- JPMorgan expects all employees in England to be in the office “on a consistent schedule” from June 21 with occupancy at any one time capped at 50%, Reuters reported on May 11 citing a memo.
- The bank in April was preparing to bring all U.S. staff back to the office on a rotational basis from July, according to a memo from the bank's operating committee viewed by Reuters.
- Chief Executive Jamie Dimon on May 4 said that working from home isn’t always suitable for everyone, especially those who want “to hustle”.
- “It doesn’t work for those who want to hustle. It doesn’t work for spontaneous idea generation. It doesn’t work for culture,” he said.
- Goldman Sachs in May asked U.S.-based employees to return to working in the office by June 14 and in the UK by June 21.
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