If there wasn't enough reason to worry about job security on Wall Street nowadays, here is another one. Finance jobs are moving away from expensive locales and into smaller cities and towns. Now this comes as no surprise to anyone, really, as firms look to cut down on costs anywhere they can. But does it signal that firms are less worried about being in the most prestigious places and will that possibly effect the types of recruits moving forward? Could financial firms moving away from a more centralized hubs based around cities such as New York really take away the talent? Personally, i'm not so sure but I will say that I've seen first hand at the firm where I work losing quality candidates because of the location. I'm not saying this is a new thing.
Departures from Manhattan came to the fore in the 1980s, as firms crossed the Hudson River to set up satellite operations in Jersey City, N.J., or sent workers to nearby Connecticut. Lucrative tax breaks and government loans stoked the shift, including a $120 million package that persuaded UBS AG to leave Manhattan for Stamford, Conn., in 1994.More moves followed the terrorist attacks of Sept. 11, 2001, as firms searched for safer places to house data and people. In one such move, Goldman Sachs Group Inc. GS +0.51% completed a 42-story building along Jersey City's waterfront after the state offered grants it valued at a total of $164 million. Goldman has scaled back the number of workers in Jersey City by 31% over nearly two years, to 2,846, as it adds jobs in other parts of the U.S. that pay a lower average wage, such as Salt Lake City.
I know that many people have long dreamed of finance in New York City, London etc but do you guys who work there see evidence of that changing? Are people more amenable to these changes as cost of living would change? Would you be open to working for a finance firm in St. Louis if thats where the jobs are?
BAML has a brand new tower in midtown. Don't think they are planning on going anywhere anytime soon.
The financial district is practically a facade now anyways as commercial buildings are being transformed into residential areas. I personally applaud the transition, its a win for me if I am able to work in an area where the cost of living isn't inordinate and make the same pay. At the same time, I have already been exposed to the nyc experience where as new comers may not be able to.
Jersey City has really nice offices though with arguably better views than a lot of Manhattan offices. Direct waterfront offices and just a ferry ride away from the Financial District. I took a couple visits to my BB's office down there when I was an intern and personally I would've rather worked there than Manhattan. You pay lower taxes also on your income.
Weird how a 7 minute ferry ride can make a big difference in your disposable income.
Means you work at Goldie Sakcs.
This post is unnecessarily alarmist... Aside from UBS Stamford, I haven't heard of any front office functions being moved outside of NY. It makes perfect sense to outsource back/middle office positions to cheaper locales (Utah has been huge, for example). Nothing new here.
There's a new post on this every month on WSO. The answer will always be 'no, no one is actually leaving New York'.
This
People seem to forget that investment banking does still exist. Yeah, you can trade from just about anywhere but if you're meeting with corporate clients regularly and providing advice, you need to be based where they are.
Will it effect the types of recruits? No, money and the firms name effects the type of recruits.
How many people actually WANT to be in NYC for the sake of being in NYC. People wanting to do IBD want to be in NYC because that where the top shops are. If the top shops were in Rhode Island that is where people would want to be. I am sure if given the choice, most would prefer to live in another place where they have much higher disposable income and a better quality of life. Why live with roommates in NYC when you can have your own pad for less money in a cooler place to live. Why pay 2.5k per month to a slum lord when you can be making the same payments on your own condo/house. People are there out of necessity because that is where the jobs are. Granted there is a percentage of people that actually enjoy being in NYC but if you actually could live in a place with lower COL/higher quality of life and make similar comp, enjoy similar deal flow and have same prestige I bet a lot less would go to NYC.
DB moving some front office roles out of London to Birmingham which sounds like the most depressing thing I could imagine. For non-brits, Birmingham is about 100 miles outside of London and is a fucking miserable town.
Didn't DB also move some FO roles to Jacksonville?
If tax rates go up and wealth gets less concentrated, we'll see a lot more business happening in the rest of the country, and comparatively less happening in global cities like New York and San Francisco.
Pro tip: Buy real estate in Gary Indiana and Akron, Ohio.
Front office is not moving anywhere, and who gives a fuck about back office.
Goldman has some ER positions in ER. Citi has ER in Buffalo. DB also moved some FO positions to Jacksonville.
Frankly, I would have no problem moving outside of NYC though.
And do you guys really consider Jersey City to be outside of NYC? I mean it's practically right there. Just a short ferry ride away.
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