Wall Street firms warn of staff cuts ahead in New York as only 8% of workers are back in offices full-time

Almost a quarter of financial services firms are planning to reduce the number of New York City-based employees in the near future as the vast majority of staff continue to work remotely.

While office-workers are returning to Manhattan’s famous skyscrapers as the impact of Covid-19 on daily life wanes, the reality is that it is happening at an incredibly slow pace.

A survey by the Partnership for New York City found that only eight per cent of the more than 1m office workers in the city are back at their desks full-time. By the end of January, that number will have crept up to 13 per cent, employers expect.

Half of the largest employers in the city (47 per cent) said they expect some of their workforce to spend a majority of their time – three days a week or more – working remotely going forward.

This means that about one-third of companies (34 per cent) expect to cut back on their office space, and 13 per cent said they would likely cut headcount in the city – 22 per cent of financial services firms expect to, the highest share of any industry.

To date, major employee or departmental moves out of the city have been limited, but jobs are shifting to lower-cost locations, and increased automation of processes and better-deployed technology are allowing for a lower headcount overall.

Texas, Arizona, Florida, Colorado and well-connected, mid-sized cities elsewhere have been the destinations of choice for well-paid white-collar remote workers since the beginning of the pandemic, though this skews slightly more towards the tech sector over finance.

The survey, conducted between 19 and 29 October, stands in marked contrast to previous partnership reports, which predicted a greater return-to-work trend earlier in the year.

However, as the Delta variant of Covid-19 dragged the pandemic on through the summer, predictions from March that 45 per cent of office workers would be back at their desks full-time by now have not come to pass.

Currently, 28 per cent of Manhattan office workers are at their place of work on an average weekday.

By the end of January, this will likely rise to 49 per cent on an average day, through a rising acceptance of hybrid working patterns – 80 per cent of firms expect a permanent change to their remote work policies post-pandemic.

For example, currently, 12 per cent of workers come into the office three days a week (the most common arrangement), whereas 54 per cent are fully remote.

Companies predict that by the end of January, 33 per cent will be in the office three days a week (still the most common arrangement), and only 21 per cent will be fully remote.

The second most common arrangement is 15 per cent in the office two days a week, and the third is 13 per cent in full-time.

Leading the way in the return to the physical workplace as of October are real estate firms (77 per cent of workers in the office), financial services (27 per cent), and law firms (27 per cent).

They report that they expect daily attendance of 80 per cent, 47 per cent, and 61 percent by the end of January, respectively.

Industries with the lowest projected attendance are accounting (36 per cent), consulting (30 per cent), and tech (24 per cent).

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