Financial Firms Abandon Corporate Offices Amid COVID-19 Cost Cuts

Strategic Insights -

As the COVID-19 pandemic continues, U.S. financial firms are reevaluating their real estate footprints, with several major banks and companies announcing plans to reduce their corporate office space or continue remote work arrangements through next year. Fifth Third Bancorp is cutting about 20% of its corporate office space to eliminate $200 million in annual expenses, while Prudential Financial Inc. and Synchrony Financial are also reducing their real estate footprints. In contrast, JPMorgan Chase & Co. is urging more workers to return to offices over the coming weeks after finding that younger employees' productivity slipped during remote work.

Key Takeaways:

  • Fifth Third Bancorp will cut about 20% of its corporate office space to eliminate $200 million in annual expenses.
  • Prudential Financial Inc. and Synchrony Financial are also reducing their real estate footprints as they continue to allow staff to work from home.
  • JPMorgan Chase & Co. has found that younger employees' productivity slipped, particularly on Mondays and Fridays, during remote work.
  • Wells Fargo & Co. plans to keep most of its staff working from home through at least Nov. 1.
  • JPMorgan asked half of its investment bankers to come into its London and New York offices each day under a rotation program.
  • Goldman Sachs Group Inc. is offering staff incentives to return to the office, including free food, protective gear, and access to an on-site nursery.
  • Citigroup Inc. is circulating a survey to employees to gauge interest in partially repopulating offices in the New York City region on Oct. 5.

Statistics:

  • 20%: the percentage of Fifth Third Bancorp's corporate office space that will be cut.
  • $200 million (U.S.): the annual expenses that Fifth Third Bancorp aims to eliminate by cutting part of its corporate office space.
  • 96%: the percentage of Bank of New York Mellon Corp.'s roughly 48,000 employees who have been working remotely since March.
  • 69,000: the number of Barclays Plc staff working remotely until at least the end of September.
  • 70%: the percentage of DBS Group Holdings Ltd.'s local employees who work from home.

Sources:

  • Bloomberg
  • Bloomberg, "Fifth Third to Cut About 20% of Its Office Space Amid Pandemic"
  • Fifth Third Bancorp
  • Prudential Financial Inc.
  • Synchrony Financial
  • Bloomberg, "JPMorgan Productivity Drops Amid Remote Work, Dimon Says"
  • Bloomberg, "Wells Fargo to Keep Most Employees Working From Home Through at Least November"
  • Bloomberg, "Goldman Sachs Seeks to Lure Staff Back to Offices"
  • Bloomberg, "Citigroup Seeks Employee Input on Office Repopulation"