Wall Street Banks Lead Return-to-Office With Labor Day Push

“We're going to have a real push back to the office post-Labor Day,” said Jeff Blau, chief executive officer of landlord Related Cos., the developer behind Manhattan’s Hudson Yards project. “I think that you’ll see, certainly if we go into a bit of a recession or whatever we’re in now, as the leverage swings back to employers, they’ll use that leverage momentum to insist that people be back to the office.”

If they succeed, it would be a long-fought victory.

Employees shut out of their offices by pandemic lockdowns in March 2020 quickly settled into new routines, buying work-from-home supplies and conducting meetings on Zoom. Yet it didn’t take long for tension to emerge between bosses who wanted a return to business as usual and their workers enjoying the new-found flexibility of life without long commutes. Wall Street banks have been among the most aggressive in trying to lure people back, with many beginning that process more than a year ago.

While Goldman, Morgan Stanley and JPMorgan Chase & Co. have have long been pushing for more employees to come to the office, policies at other prominent financial firms speak to just how tricky it is to push for a full return. Last week, Jefferies Financial Group Inc. asked employees to come in on a “more consistent basis,” but said it won’t check badge swipes and has “no issue” with staffers working from home from time to time.

Still Flexible

Citigroup Inc., meanwhile, allowed employees on a hybrid schedule to work fully remotely for two weeks in August, from anywhere within their country of employment. This month, the bank expects those staffers to resume their previous routines, which usually include three in-person days a week. Since February, the private equity giant Apollo Global Management Inc. has embraced similar hybrid schedules for most employees.

Even as jobs cuts pick up with companies bracing for a downturn, it’s unlikely that Labor Day will mark a “great reckoning” for the office return on Wall Street, according to Bhushan Sethi, joint global leader for people and organization at PwC, and an adjunct professor at the New York University Stern School of Business. Companies fighting for talent, he said, need to recognize they have to remain somewhat flexible.

“Banks will be loathe to be too aggressive,” Sethi said.

Wall Street isn’t alone in lobbying to get people back. Apple Inc. and Peloton Interactive Inc. have told US employees to report to their offices this month, while Comcast Corp. is requiring workers to be in several days a week.

The latest push comes after the pandemic fueled a generational shift in attitudes about work. A recent survey from McKinsey found that among those given the chance to work from home at least one day a week, 87% take it. In addition, employees have been empowered by the tight labor market to ask for perks and raises.

Shifting Attitudes

The power dynamic between workers and bosses will be key to any success in ordering workers back. During the past year, companies worried about retention have been reluctant to insist. Now, that balance is starting to shift. While the US added a solid number of jobs in August and wages continued to rise, unemployment numbers are ticking higher. News of layoffs and predictions of an impending recession are making workers nervous. Some report feeling less confident negotiating to work from home.

“That’s going to be an incentive for people to get back to work,” said Bill Rudin, chief executive officer of Rudin Management, a commercial and residential developer in New York. “As you start seeing some layoffs happening, people will say, `Woah, I don’t want to be laid off, I want to be in the office and have bosses see that I’m working really hard.’”

The work-from-home culture has put New York’s office landlords in a bind. Just 35.3% of workers in the metro area were back at their desks in the week ended Aug. 24, according to card-swipe data from Kastle Systems. That low level of occupancy, coupled with news that technology giants Meta Platforms Inc. and Amazon.com Inc. were pulling back on planned expansions, has raised concerns about the future of the city’s office market.

Now that employees have experienced — and grown accustomed to — the benefits of remote work, it will be nearly impossible to reverse course, according to Dan Cornfield, professor of sociology, political science and American studies at Vanderbilt University.

“The terms of employment may have permanently changed,” he said. “Employers may not be able to leverage the greater bargaining power to have more employees return to the office.”

Bloomberg News provided this article. For more articles like this please visit bloomberg.com.

Read more articles by Claire Ballentine, Natalie Wong