JPMorgan trades banker offices for shared desks

JPMorgan mandates Sept. 21 office return for sales, trading managers and teams

JPMorgan trades banker offices for shared desks

UPDATE: Sept. 29, 2020:  Thousands of office workers in JPMorgan Chase's consumer unit can continue to work remotely until next year, the bank said in several memos Monday.

The directive — which excludes branch workers and some in operations, a source told Bloomberg — marks a break from the company policy that mandated Wall Street senior traders return to the office last week. JPMorgan's consumer and community banking unit comprises more than 122,000 employees, the wire service reported.

“Generally, anyone working remotely today will continue to do so through the end of the year, assuming we can maintain productivity levels,” reads one of the memos, seen by Bloomberg. “Our overall productivity levels have remained high. That’s remarkable and something that should make us all proud.”

  • JPMorgan Chase told its sales and trading teams' managing directors and some executive directors they and their teams must return to the office by Sept. 21, The Wall Street Journal reported, citing unnamed sources.
  • The bank is making remote work exceptions for employees with child-care issues and those with preexisting medical conditions, Troy Rohrbaugh, JPMorgan's head of global markets, and Marc Badrichani, the bank's global head of sales and research, told staff on a conference call Wednesday, according to the Journal.
  • The directive appears to be the most fervent line in the sand drawn in a segment struggling for consensus on how long to continue remote-work policies amid the coronavirus pandemic.

Dive Insight:

JPMorgan Chase isn't the only big U.S. bank to lay out a potential office-return agenda this week.

Goldman Sachs told employees in an email Wednesday it will adopt a rotational approach to letting staff return — similar to a plan JPMorgan laid out last month for its corporate and investment bank.

“Over the coming days and weeks, colleagues …

 will hear from their divisional, business and/or local leadership about what to expect for the months ahead, including team rotations in the office where possible, with the goal of giving everyone who can do so an opportunity to come in to their office,” CEO David Solomon and two other Goldman executives wrote. “For each location, as we further open and scale to capacity, we continue to closely manage the number of people in our buildings on any given day on a cross-divisional basis.”

The bank told its traders Thursday that, although rotations would begin next month, “we remain supportive of a collaborative and flexible environment, and encourage you to discuss the arrangements that work for you with your manager,” the Financial Times reported.

Citi circulated a survey Wednesday to its employees in New York, New Jersey and Connecticut, gauging staff members' interest in coming back Oct. 5. The bank would initially cap daily office presence at 30%, Bloomberg reported.

However, the questionnaire also asked employees who opt to stay home to give a general reason, allowing for Citi to offer potential solutions.

For example, workers who are ill at ease with taking mass transit are being asked if a bank-provided shuttle from hubs such as Grand Central Terminal would make them more comfortable.

Other finance companies have embraced flexibility. Although American Express opened its New York headquarters this week to nonessential employees — capping office capacity at 10% — the card network also said in a statement it is extending its optional remote-work policy through June 30, 2021.

“We're taking this step to offer colleagues more flexibility to balance work and family obligations, particularly as many of you must plan for an uncertain academic year that may involve remote learning or have elderly relatives to care for,” American Express CEO Stephen Squeri said. “In addition, many of you rely on public transportation to commute to work and may not feel comfortable using mass transit for the time being.”

Camaraderie, junior staffers

At JPMorgan Chase, Rohrbaugh and Badrichani told employees Wednesday that camaraderie would suffer and junior staffers wouldn't get necessary training if traders worked from home full time, people familiar with the matter told the Journal.

The executives said the bank would be monitoring the virus carefully and would reverse course if the spread worsened. Employees entering the bank's building fill out a daily health questionnaire, and the bank operates temperature screening, has spacing between desks and provides hand sanitizer. JPMorgan also recently launched a mandatory training program explaining new office rules.

“It's important to set the tone from the top, and with a new class of analysts coming in, we cannot not have a senior presence on the floor,” a source told the Financial Times. “It was a message for the leaders, not the troops,” the person said, adding it affected “a few hundred managers” and “a few thousand employees.”

President Donald Trump praised the move Thursday in a tweet that mistakenly characterized it as an order to the bank's entire workforce.

Sales and trading staff aren't the only employees JPMorgan Chase has coaxed into returning. The bank requested that, beginning this week in London and New York, 50% of its investment bankers be in the office on a given workday, according to Bloomberg. That's double the previous 25%. Bankers will work from home or the office on alternating weeks, a source told the wire service.

Nonetheless, traders seem to be the coal mine canaries of choice for several banks. Morgan Stanley returned some traders to downtown locations as early as mid-June, although it's unclear whether a major U.S. bank has mandated a return on such a scale yet.

JPMorgan has instituted some incentives to persuade traders below the managing director level to return, reimbursing Uber and taxi rides to the office. (Update: The bank ended Uber reimbursements for junior traders, Bloomberg reported Sept.

16, citing anonymous sources.)

But if the motivation for return stems from a belief that business could improve through a trading-floor presence, there's also an argument that business — particularly in trading — is already booming.

Trading revenue from JPMorgan's investment bank jumped 86% in the second quarter, compared with last year's same three-month span. The bank's fixed-income traders generated a record $7.

3 billion during the quarter.

The bank's rivals have seen similar bumps in that segment — a 50% increase in fixed-income trading revenue at Bank of America; 68% at Citi; 149% at Goldman Sachs.

It remains to be seen whether JPMorgan's banking brethren will follow in the message that returning to the office is safe. Wells Fargo, for one, announced last week it was extending its remote-work option until Nov. 1 for 70% of its workforce. TD delayed returns until the new year. Truist went even further — through Jan. 31, 2021.

Deutsche Bank sales and trading staffers are arranging to work from home two or three days a week even after the pandemic ends, people familiar with the matter told the Journal.

And UBS Group's investment bank co-presidents told employees Tuesday in a memo that “flexibility and remote working” will continue. “We expect you to return at your own pace and when you feel comfortable,” Piero Novelli and Robert Karofsky wrote, according to the Journal.


When greed and fear collide: Wall Street is already calling traders back to the office

JPMorgan trades banker offices for shared desks

On April 2, the day that coronavirus infections around the globe hit 1 million, managers inside JPMorgan Chase & Co. were emailing their latest plans for staffing New York-area trading floors amid the deadly pandemic.

One worker on the sales team noticed a colleague wasn’t on the list and asked where he’d be.

“Corona Town, U.S.A.,” the person wrote back. Then one of the bank’s credit-trading leaders, Nicholas Adragna, weighed in: “The trading desk will be in the office unless they have a medical condition with a dr’s note.”

The trading desk will be in the office unless they have a medical condition with a dr's note

More than 100 employees were on the message chain seen by Bloomberg, and some were horrified. It came soon after an outbreak of COVID-19 inside JPMorgan’s Madison Avenue headquarters, in which at least 16 people tested positive on a single trading floor.

Some employees complain they’re getting conflicting messages from middle and senior managers about coming into offices, where billions of dollars of profit are at stake, and that they would rather follow the advice of government officials to hunker down at home.

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    “We’ve stated many times that anyone who doesn’t feel comfortable coming into the office doesn’t have to,” said Brian Marchiony, a spokesman for JPMorgan. “We have never had a policy requiring, or even requesting, a doctor’s note.”

    Those tensions aren’t limited to JPMorgan. While Wall Street firms have told most employees to work remotely, a number of traders and bankers who set up at home say they have been getting phone calls and messages from managers urging them to return to offices, some of which recently saw infections.

    Small and large firms are trying to maintain enough on-site staffing to ensure swift trading. It’s the finance industry’s version of an issue spanning the U.S., where “essential” workers feel they have to choose between keeping their jobs and risking their lives.

    Trading Deluge

    Some investment banks have publicly touted the degree to which they are able to let employees work remotely, with Goldman Sachs Group Inc. recently announcing that only one of every 50 workers was on site.

    But most trading divisions require additional staffing on high-speed office terminals to handle the deluge of customer orders as markets swing. Bank of America Corp. has said it has about one in 20 trading employees in the office.

    At JPMorgan it’s about one in five in trading.

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    Around the same time that JPMorgan bond-trading executives were emailing each other, Jason Sippel, the bank’s global head of equities trading, held a conference call with his subordinates. He said the trading division isn’t as effective when too many people are working remotely but that it’s trying to be respectful of people’s circumstances, according to a person who heard the call.

    Still, the situation on Wall Street contrasts with the pressures on tellers and call-centre personnel to show up in consumer banking operations even though they earn less.

    And outside the financial industry, the situation is even harsher, with about 10 million people filing for unemployment benefits in just two weeks, and workers at companies such as Inc.

    airing grievances over safety conditions.

    A trader wears a mask as he works on the floor of the New York Stock Exchange on March 20, 2020.

    Photo by Lucas Jackson/Reuters files

    Traders have long been known to work through illness, but in the past few weeks those attitudes have shifted as news stations showed refrigerated trucks outside New York hospitals, medical tents in Central Park and public health officials begging people to stay home.

    One trading executive at a major New York brokerage said he wanted to be the last person on his staff to stay at the office.

    Just before he left for home last month, he was exposed at work to the virus. He eventually developed a cough. Now outside New York, he has been working in solitude and staying up until 1 a.m.

    He recently got tested but still hadn’t received his results as April began.

    This advertisement has not loaded yet, but your article continues below.

    Inside BGC Partners, an affiliate of Cantor Fitzgerald, workers received a memo marked “important” last month notifying them that no government orders were stopping them from showing up. “We remain open,” the memo said.

    “Driving to the offices and using mass transit are permitted in order to travel to and from our office.” Some BGC employees privately complained they felt pressured to keep coming downtown — even as other memos laid out the option of working from home.

    A BGC spokesman declined to comment.

    Still, two people at the firm who fell ill said they had no complaints. One credited managers for sending his entire desk home after the first person got sick. Another said he kept working in isolation until his symptoms were too severe, and that managers then gave him ample time off to recover.

    Skeleton Crews

    Most big banks announced similar strategies for preventing the spread of the virus at work: They assigned skeleton crews to trading floors and so-called disaster recovery sites, and sent the rest home.

    But within days, traders in offices privately complained about colleagues continuing to cluster around them. Some said they waited weeks for technicians to physically separate rows of specialized terminals.

    A JPMorgan trader in London said he was initially sent to the basement of the firm’s 19th-century building along the Thames, where scores of colleagues nervously worked side by side. The conditions improved when back-office staff were allowed to leave. He said he, too, has since been told he needs a doctor’s note to work from home.

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    A nearly deserted Wall Street and the steps of Federal Hall.

    Photo by Mike Segar/Reuters

    Inside Natixis SA’s New York office, nerves frayed after the French bank sent traders to a recovery site outside the city so cramped that social distancing was impossible, one person said. The firm later ditched the plan and sent people home, where employees received an important email from a top executive: “Highly Confidential: COVID-19 — Staff Infection List.”

    Workers who clicked the attachment realized it was an anti-phishing test on behalf of the compliance team and that they had failed it. Many were furious, the person said.

    “Natixis strongly rejects any suggestion that it has put its employees at risk,” said Daniel Wilson, a Natixis spokesman in Paris, adding that all investment banking employees in the Americas have been working from home since mid-March. “We have taken rigorous measures in the U.S., as elsewhere, to protect our employees’ health and help slow the propagation of the virus.”

    ‘Push Everyone’

    Market swings can generate big profits and losses for banks, and most executives agree it’s easier to navigate the turmoil from trading floors, where connections are faster and communication is easier.

    On March 26, the fourth day of New York’s statewide lockdown, JPMorgan’s Adragna dashed off a note to his subordinates. Troy Rohrbaugh, the bank’s global head of markets, “continues to want to push everyone to get back into the office,” Adragna said.

    A record had just been shattered in the investment-grade credit market, as U.S. companies raced to issue billions of dollars in bonds to bolster their financing. Adragna’s team had traded more than $3 billion of bonds that day and, the reasoning was, that wouldn’t have been possible if they’d been working from home.

    This advertisement has not loaded yet, but your article continues below.

    “With the amount of issuance trading we can really separate ourselves and do a great job for customers by being in the office,” Adragna wrote. “Let’s attack and use this as an opportunity to differentiate ourselves both internally and externally. LET’S GO.”

    Inside the Wall Street subway station in New York City.

    Photo by Michael Nagle/Bloomberg

    JPMorgan’s spokesman disputed the notion that Rohrbaugh would push anyone to come into the office and said the markets chief has reiterated on his regular calls that anyone who doesn’t feel comfortable coming into the office doesn’t have to.

    Elsewhere within the industry, middle managers have cajoled reluctant employees by suggesting that their presence is needed to comply with regulatory pressure to more closely monitor traders’ dealings. It isn’t clear which watchdogs are making such requests.

    The Securities and Exchange Commission and Financial Industry Regulatory Authority haven’t been pressing banks to increase on-site staffing in recent weeks, officials said. In a public notice last month, Finra said people would need to telework and that it would let firms improvise systems “reasonably designed” to supervise them.

    Working from home has received mixed reviews from bankers and traders. Some of them grimace at the technical difficulties and chafe at the awkwardness of working among family. Others are enjoying the time being close to loved ones, or finding other reasons to embrace it.

    One senior trader at Goldman Sachs said she’s been writing emails while sitting on a yoga ball, and doing pull-ups on bathroom breaks. When she has to go back in the office, she said, she’ll miss doing burpees, a type of squat thrust, while listening to conference calls.

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