From the very beginning, Wall Street banks were reluctant to let their most-critical front office employees – especially traders – work from home despite the obvious risks presented by the coronavirus. Even after a whole floor of JPM traders in New York were infected by a couple of coworkers, Goldman and JPM were rumored to still be pressuring employees to make sometimes illicit appearances in the flesh, and when working from home has been the only option, bankers have reportedly been putting in more additional hours as managers assume they’re available at all hours.
While the Wall Street culture that revolves around ‘the floor’ will likely endure once the lockdowns are lifted in the US, some of the largest banks in the UK are insisting that they won’t recall employees to the office until things are 100% safe. And some may never return, having proved that they’re equally efficient working from home. As Bloomberg put it in its headline: “Bankers Aren’t Returning To Skyscrapers Any Time Soon, If Ever.”
The reason for this? During Barclays post-earnings call earlier, CEO Jes Staley said warehousing thousands of workers in office buildings and skyscrapers might be a “thing of the past” – especially if social distancing means only two people can ride an elevator at a time for the next 2 years.
Staley’s concerns echoed those of several rivals, Bloomberg said.
“There will be a long-term adjustment about how we think about our locations,” Staley said on a conference call after the bank reported earnings on Wednesday. Branches might work as alternative sites for investment bankers once staff are cleared to stop working from home, he said.
It’s possible this is a function of the UK’s significantly-higher mortality rate, which just took another tick upward on Wednesday after thousands of new home deaths were reported, as well as the political backlash over Boris Johnson’s initial response (based on recommendations from government scientists that were later determined to be flawed) which has made the PM reluctant to release concrete guidelines about his plans to reopen the economy.
Because in New York City and most places, financial services employees – from analysts, to traders to bank tellers – are considered essential. And while many of the white collar workers in the industry have been working from home with little issue, traders in NYC have discussed being pressured to take the subway to the office and take other steps that the employees said would leave them at risk of being infected.
JP Morgan said earlier this month that it had developed a plan to start returning some staff to its offices. The bank has said it’s exploring the idea of hiring “door attendants” to push elevator buttons and open doors for employees.
Meanwhile, Goldman is reportedly trying to develop a system for employees to open doors without actually touching them, perhaps by stocking towelettes.
Regardless of what happens in Europe and the US, right now, the first global financial hub to reopen will probably be Hong Kong, where most shops and bank branches have reopened, and life is rapidly settling back into its normal rhythms.
It’s also one reason to suspect that the slump in London’s commercial property market might be even more disastrous than in the US, although granted financial services is just one industry.