Deutsche office siren flies in the face of December plan
When Deutsche Bank Americas CEO Christiana Riley told Bloomberg on Tuesday that “New York’s demise is grossly overrated,” she may have been referring to her own earlier proclamations.
Riley confirmed to the news service on Tuesday that the bank plans to fire 5,000 employees in New York City over the next six months. But as late as last December, Riley told the Financial Times that about half of the German lender’s New York-based employees could “in theory” move to “smaller centers and pockets” by 2025. .
“I’m optimistic that New York City remains, to some extent, a hub,” Riley told the publication in December. being a centralized presence in New York … but that might not be relevant to all of these people. ”
Deutsche, for its part, maintains at least two U.S. hubs outside New York: around 2,000 employees – specializing in human resources, compliance, and risk – in Jacksonville, Fla., And 600 other tech-centric workers in the North Carolina Research Triangle.
And at the end of last year, some banks – notably Goldman Sachs reportedly considered moving its asset management business to South Florida – were spurred on to avoid New York in the name of cost savings. .
Deutsche, it should be noted, is more than two years away from a three-year effort to cut a quarter of its costs, including cutting 18,000 jobs.
The German lender was also one of the first to adopt a long-term remote work strategy, telling its New York-area employees in September 2020 that it didn’t expect them to return. in the office before July 2021. This time coincided with the planned opening. from a new US headquarters to Columbus Circle – by the way, the site of Tuesday’s Bloomberg interview.
Within that core is a dichotomy: Riley’s two lines of thought can coexist. Cynically, Deutsche could consider a return to the office for its 5,000 New York-area employees in the next six months and then plan for them to disperse in four years. And the bank’s new headquarters would go even further to look like a worthwhile investment.
See multiple arguments
Deutsche’s thinking is hardly one-sided. He sees the value of remote work. CFO James von Moltke told employees in April that the bank would let them work from home 40% to 60% of the time, going forward. And yet the lender also sees a social cost to this benefit.
Researchers at the bank proposed in November 2020 that Americans who work from home voluntarily after the COVID-19 pandemic should pay a 5% tax. That money – $ 48 billion a year, according to Deutsche figures – could fund grants of $ 1,500 for the 29 million American workers who must work locally and earn less than $ 30,000 a year, at the end of the day. exclusion of those who earn tips, the researchers said.
This month, the bank told clients in a report that it expects offices in financial centers such as London and New York to fill up quickly, citing the increase in transport ridership. in common as a sign that the remote work “honeymoon” is waning.
“People are starting to realize that the freedom to work from home has certain drawbacks: dilution of the corporate culture, problems with coordination and even the mental well-being of some workers,” said Marion Laboure, a Deutsche Bank. , in the report, according to Bloomberg.
Riley, speaking to the press service on Tuesday, said: “We are delighted to see New York’s ecosystem come to life.”
She said the bank plans to grow organically in the United States – but not through acquisitions – and increase its market share after a resizing over the past two years.
“We made some tough decisions about shutting down businesses that weren’t successful, that weren’t profitable for us in this market,” said Riley.
Regarding office returns, a Deutsche survey, included in this month’s report, found people expect to continue working remotely two to three days a week after the COVID-19 pandemic is over. .
However, although employees saved money by not traveling, new workers lament a lack of connection with their peers, downtown businesses have been hit by the lack of foot traffic and home workers. have found themselves more vulnerable to cyber attacks, Laboure mentioned.