Why Wall Street wants to stop remote working and return to its offices: NPR
David Gura / NPR
You can assume that Wall Street boss James Gorman and falafel maker David Shadaha don’t have much in common. But after months of working remotely, they share a goal: to reintegrate bankers into their New York buildings.
With few exceptions, the big banks on Wall Street are already preparing to return to office work as long as workers are vaccinated. Morgan Stanley CEO Gorman expects most of his staff to be back by Labor Day.
“I will be very disappointed if people haven’t found their way into the office,” Gorman said. in a video posted by Morgan Stanley. “And then we’ll have a different conversation.”
It might not be great for all Morgan Stanley employees, but it’s good news for Shadaha and others whose livelihoods depend on Manhattan’s legions of white collar workers.
Shadaha operates his “King of Falafel & Shawarma” in Midtown, across from investment firms BlackRock and Evercore.
When the pandemic emptied the streets of New York City, Shadaha had to put her cart away. He spent five months as a GrubHub delivery man.
“It was a disaster,” Shadaha says of the impact of the pandemic.
Today there are signs of recovery in Manhattan. But for every café opened, another has closed its doors for good. The same is true for delicatessens and bakeries.
Foot traffic is returning, but it is down 70% from what it was before the pandemic, with much of international tourism still closed.
It makes people like Shadaha even more dependent on office workers. He estimates that he only earns about half of what he earned in February 2020.
“I only work for offices here,” he says, pointing to the skyscrapers that line Park Avenue. “So if there’s no one here, it’s like business is dead.”
Goldman Sachs CEO calls remote working an ‘aberration’
Soon Shadaha should start seeing more clients.
Financial firms may have reaped record profits in an unprecedented year of remote working, but for some time Wall Street executives have hinted they want workers to come back.
In February, for example, Goldman Sachs CEO David Solomon referred to remote work as “an aberration that we will correct as soon as possible”.
Bankers have already returned to Goldman Sachs since mid-June.
Blackstone executives have called on the fully vaccinated workers to return. Citigroup’s head of human resources said the plan is for 30% of that company’s staff to be in the office this summer.
Alex Wroblewski / Getty Images
That Wall Street is coming back so soon is no surprise to those who work in the industry. The job of a banker is very stressful and high stakes, with long days spent in busy offices or in crowded trading rooms. The benefit comes in the form of perks and nice pay, like the ability to pay for expensive dinners or black cars at home.
It was the kind of environment that James Davies, the global head of Deutsche Bank’s institutional client group, had become accustomed to, which came as such a shock when he returned to a partially deserted office.
“You know, having worked in the industry for 25 years, it was kind of weird going into the trading floor on a Wednesday morning and seeing, I guess, six to ten people here, versus the hundreds that we would have. normally, he recalls.
Today, he estimates it at 40% occupancy, but rising.
For Davies, it was a decision made out of convenience and cultural necessity.
“There is a real benefit to people being in one place,” Davies says, also noting the importance of what he calls “soft benchmarks of business.”
Of course, not all banks will wait for their employees to return five days a week. UBS announced this week that it will adopt a hybrid work model. And the French bank BNP Paribas, which has 14,000 employees in North America, also plans to provide flexibility.
“We expect everyone to come to the office every week, but obviously not full time,” said Claudine Gallagher, director of human resources for BNP Paribas’ corporate institutional banking group in the Americas.
Why Wall Street matters to New York
Increasing the number of merchants and bankers working in New York offices matters more than in terms of preserving Wall Street culture.
A 2021 report of the New York State Office of the Comptroller estimates that the securities industry employed 179,900 people, or 19% of New York City’s workforce.
That means dozens of ancillary businesses depend on Wall Street, like Schumer’s Wine and Liquors near Jefferies Investment Bank and around the corner of Shadaha’s Cart.
Larry Duke, owner of the store since 1978, says he never considered closing, even when his business fell nearly 80%. He laid off staff, renegotiated his lease with his landlord, and took out two loans under the Paycheck Protection Program to stay afloat.
David Gura / NPR
However, business has not fully rebounded.
“It’s a roller coaster, and there’s no compelling reason why you’re having a good day or why you’re having a bad day,” he says, with his German Shepherd, Klaus, nearby.
But things are improving as the summer progresses.
Not too far away, Shadaha has a line of customers waiting for their lunch orders. The workers are coming back and they want their usual packaging or tray like the good old days.
“It’s like life is coming back,” Shadaha says.