Although it’s not iron-clad and could change, JPMorgan Chase is reportedly readying itself to have employees return to the office five days a week. That would end hybrid work for thousands of employees, Bloomberg reported.
About 60% of staff, including bank managing directors, many traders, and retail branch workers, have been under the five-day-per-week directive, since April 2023.
The move could influence the banking industry, or perhaps only partly. Bloomberg noted that some of JPMorgan’s competitors still provide more flexibility, probably as a strategy in the race to hire talent.
“While academic research on productivity and profitability remains mixed, sentiment within much of the financial sector is firmly slanted towards in-person work,” said Thomas LaSalvia, head of Moody’s commercial real estate economics in emailed remarks.
“Whether 5 days a week is mandated, or a more flexible approach is offered, many firms claim culture, professional development, and innovation require employees to consistently interact in person; this cements our view that office real estate performance has nearly bottomed out, and a clear path to a new equilibrium is emerging,” LaSalvia added. “We see vacancy rates continuing to rise this year, but that will only be in a subset of ‘obsolete’ buildings in less desirable neighborhoods. We will see growth in newer mixed-use neighborhoods with modern development and vibrant streets. Office is now firmly in a right-sizing part of its evolution.”
It's also not clear how effective or efficient such plans will be. Amazon said in September 2024 that it would require its employees back in the office five days a week. In December, though, the company didn’t have enough space for them.
JPMorgan is building a 60-story skyscraper in midtown Manhattan for upwards of 14,000 workers. The bank is also sounding like a tech firm, with such perks as yoga and cycling rooms, meditation spaces, outdoor areas, and a state-of-the-art food hall.
Citigroup, Walmart, and Stellantis tightened requirements to work in the office. Bloomberg said that some employees who tried to negotiate by saying they wouldn’t work in the office were fired.
Kastle’s office occupancy data shows that for Tuesday, December 31, 2024, an average of data across 10 metros showed occupancy of 19.3%. In 2022, the number was between 40% and 50% while in 2023 it was slightly above 40%. And yet, on December 10 and December 17, the 2024 averages where higher than the past two years.
It may be the economy will ultimately push conditions in the favor of employers, as white-collar jobs are getting scarcer as labor markets get tighter.