JP Morgan boss plans to ‘drastically’ cut office space

Jamie Dimon

JP Morgan will need “a lot” less office space in the years to come as some investment banking staff continually shift to part-time work from home.

The bank should only need 60 seats for every 100 people, wrote boss Jamie Dimon in his annual letter to shareholders.

He also warned that the bank was likely to move people out of London and into Europe due to Brexit.

He said Europe “has had and will continue to have the upper hand” in the Brexit negotiations.

The number of people leaving the UK depends on still unresolved issues in these discussions of how financial services work, he said.

“We may reach a tipping point many years from now where it may make sense to move all functions that serve Europe out of the UK to mainland Europe,” said Mr Dimon.

In the letter, he warned that a split in Europe would hurt the UK’s economic prospects for years to come.

A sign outside the headquarters of JP Morgan Chase and Co in New York on September 19, 2013.

Jamie Dimon said JP Morgan is still planning a new headquarters in New York City, but will put more staff in the same space.

“Brexit has been accomplished, but many issues still need to be negotiated. And in these negotiations Europe has had and will continue to have the upper hand,” he said.

“In the short term (ie the next few years) this cannot be a positive for UK GDP.”

His outlook for the UK contrasted with his forecast for the US, where he said a “boom” could last until 2023.

“ Frayed American Dream ”

Mr Dimon said growth in the United States would come from government spending plans – which have included billions of dollars in emergency virus aid – as well as “euphoria” over the end of the pandemic, supported by the savings families have accumulated during the lockdowns.

“The permanent effect of this boom will only be fully known when we see the quality, efficiency and sustainability of infrastructure and other government investments,” he said.

At the same time, he said the United States needs major changes to deal with widening income inequality, which he accused of leading populist political movements on the left and right.

He called for raising the minimum wage, raising taxes on the rich and eliminating tax breaks that benefit private equity firms, race cars and private jets.

The United States should also invest in “modernizing” the country’s infrastructure and introducing a carbon tax to help fight climate change, he said.

“Many of our citizens are unresolved, and the fault line of all this discord is a unraveling American dream – the enormous wealth of our country goes to very few. In other words, the line fault is inequality, ”he said.

Rise of the ghost banks

The 66-page letter from the director of America’s largest bank was very varied, touching on issues ranging from healthcare to job training.

It comes as President Joe Biden proposes a roughly $ 2 billion spending plan that would increase investment in climate research and technology and direct billions to improve healthcare and modernize the country’s infrastructure, including the Internet.

Joe Biden in 2021

Mr Dimon said the US corporate tax rate, which Joe Biden wants to increase, should remain “globally competitive”

Mr Biden wants to raise the corporate tax rate from 21% to 28% to help pay for investments.

Mr Dimon did not directly address this proposal, but warned in the letter that corporate taxation reduces growth and that the United States should remain “globally competitive”.

On the issue of remote work, he said he expected “a lot” of staff to return to offices full time, “some” working under a hybrid model.

About 10% of employees – in “very specific roles” – may be allowed to work completely from home, he said.

His comments are consistent with many other bank bosses, such as Goldman Sachs chief David Solomon, who said he was eager to see people return to the office.

Mr Dimon also warned that players such as Amazon, Walmart and tech companies were increasingly competing with the bank, attracting more activity from the traditional financial sector.

“While it is not certain that the rise of non-bank and shadow banks has reached the stage of systemic risk, this trend is accelerating and must be monitored diligently, which we do regularly in our own business.” , did he declare.

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