Fearless Girl, a bronze sculpture in front of the New York Stock Exchange (Photo by TIMOTHY A. CLARY/AFP via Getty Images)
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State Street Corp.
is vacating its two Midtown Manhattan offices, becoming the latest financial firm to leave New York City.
The Boston-based giant in asset custody and management told employees it expects to sublease its two offices near Rockefeller Center to other companies, according to a report Monday in The Wall Street Journal. More than 500 workers in its custody bank and money-management businesses will be affected.
Like other companies, State Street staffers worked from home during the pandemic. But even after employees were allowed to return to the office if they followed safety measures, many did not.
Some financial companies began to question the value of having a Manhattan office considering New York City’s costs, taxes and uncertain recovery from the pandemic. A survey last year found that 25% of office employers planned to cut their presence in the city by 20% or more and 16% would move jobs to the suburbs or elsewhere.
Goldman Sachs Group
is keeping its New York office but expanding its West Palm Beach, Fla., offices by as many as several hundred employees in the near future, the Journal reported.
Paul Singer’s Elliott Investment Management LP hedge fund moved its headquarters from New York to West Palm Beach in early 2021.
Asset manager AllianceBernstein Holding LP in 2018 announced plans to move its headquarters, CEO Seth Bernstein and most of its New York staff to Nashville, Tenn., as part of cost-cutting efforts.
The firm cited lower state, city and property taxes compared with the New York metropolitan area, as well as Nashville’s affordable cost of living, shorter commutes and ability to draw talent. It plans to relocate 1,250 jobs to Nashville by 2024, and will officially open its new Nashville office this fall.
The trend threatens the vitality of the nation’s financial capital as well as office culture of the city’s financial firms.
“It’s certainly a wake-up call that we cannot take for granted New York’s position as the financial capital,” Kathryn Wylde, CEO of business group Partnership for New York City, told the Journal.
The increase in Covid-19 cases caused by the Delta variant has caused logistical headaches for companies trying to persuade employees to start commuting and working in close quarters again.
Asset-management giant
BlackRock Inc.
is among the companies postponing their return to the office. BlackRock pushed the return to its New York headquarters to October.
State Street is giving its New York workers the option of working in its New Jersey or Stamford, Conn., offices and is leasing some co-working space in Manhattan, but is letting groups within the company decide what mix of in-person and remote work they need, the Journal reported.
A popular tourist attraction: the “Fearless Girl” statue that State Street commissioned, will remain where it stands outside the New York Stock Exchange. The statue was installed in 2017 and is meant to send a message about workplace diversity.
In January, State Street announced plans to cut 1,200 jobs, or 3% of its workforce, and to reduce office space for cost savings.
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