NEW YORK CITY-JP Morgan Chase & Co. has taken a dramatic cost cutting measure concerning branch development and reportedly is considering relocation of its headquarter offices from Manhattan to Brooklyn—which also would lower the bank's expenses.
Chase officials said Tuesday they are going to stop adding branches as more customers bank online, according to Crain's New York Business. The bank will rest at 5,600 branches nationwide, and these outposts will have 20% fewer staffers by 2015 than they did in 2011. Staffing at the new branches will shrink to six from nine and the number of tellers from four to two.
Further, Chase said future branches would be 20% to 40% smaller than existing ones, which average 4,400 square feet. The banking concern's existing branch network "fits very well now with customer needs," Gordon Smith, chief executive of consumer and community banking, reportedly told an investor gathering.
Meanwhile, the bank is considering seriously the idea of moving 2,000 employees to offices in Brooklyn's MetroTech Center, a popular office complex. JP Morgan Chase did not return a request for comment by press time.
Employees in Brooklyn would largely come from 1 Chase Manhattan Plaza, the 60-story Lower Manhattan skyscraper the bank sold to Shanghai-based Fosun International last year. If JP Morgan follows through with this plan, it would be a shot in the arm for Downtown Brooklyn.
"Were they to come, it would be a validation of our office market here," says Tucker Reed, president of the Downtown Brooklyn Parternship, to Bloomberg.com. However, there are concerns that come with such a relocation.
"The only drawback, if you can call it that, would be the challenge it creates," he continues. "It means there would be even less office space for us to grow into. It makes our space dilemma a little more acute, but that's a good problem to have."
JPMorgan owns 4 MetroTech Center, with about 1.35 million square feet, and 3 MetroTech Center. The other six buildings at the office park are owned by Forest City Ratner Cos.
The 16-acre campus was initially occupied by financial firms, including Bank of New York and Bear Stearns Cos. But in recent years, the complex has attracted technology and media companies such as MakerBot Industries LLC, a developer of three-dimensional printers; and ImpreMedia LLC, which publishes Hispanic newspapers including New York's El Diario La Prensa. GlobeSt.com's parent company, ALM, has offices at 4 MetroTech.
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Rayna Katz
Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.
