E.Uropa’s largest bank, HSBC, will do away with its boardroom on the 42nd floor of its London headquarters, CEO Noel Quinn has announced. In future, the top managers will only have a “hot desk” two floors below in the open-plan offices. This means that they no longer have permanent offices and desks; instead, everyone looks for a free space. The 42nd floor of the 46-story high-rise in Canary Wharf’s financial district is being converted for customer meetings and meeting rooms.
This indicates an accelerated revolution in the work and office culture in one of the world’s most important banks. The permanent offices are “empty half the time because we travel around the world,” said CEO Quinn. That was a waste of real estate space, he told the “Financial Times”. HSBC announced weeks ago that it would reduce its office space and real estate costs by 40 percent over the next few years, while shedding around 15 percent of its current 235,000 jobs. Other banks such as Lloyds are also planning to significantly reduce their office space.
The Deutsche Bank and other Frankfurt institutes are also examining how real estate costs can be reduced after the home office experience of the pandemic. The board members should, at least at Deutsche Bank and DZ-Bank, continue to have their own permanent offices, as was heard when asked. The situation is different in the headquarters of ING Germany, which is also located in Frankfurt. At the end of 2017, the largest German direct bank converted its boardroom into an open-plan office in which the entire management team works at a large oval table.
“Our employees want flexibility, and we give them that”
The board members can switch to meeting rooms for sensitive discussions. “In the beginning it was a big change, but now we don’t want to do without it”, CEO Nick Jue told the FAZ on Monday. “The communication channels are shorter, the transparency greater. This uncomplicated type of cooperation helps us a lot in the current situation in which we mostly work from home – only that our round table is now virtual. “
But so far, hardly any other bank has transformed the world of work at the top as radically as HSBC. Quinn thinks that the tip must understand what is going on underneath. Fixed offices are given up for “hot desks” in open-plan offices. More and more employees work flexibly and sometimes from home. Banks like Nationwide building society recently adopted a hybrid work model for their 13,000 employees. The internet banking revolution went even further. Not only will the majority of their 2000 employees be allowed to stay in the home office in the future if they want to. You can even go abroad and work from there for up to 60 days a year. Vice President Jim MacDougall said: “Our employees want flexibility, and we give them that.”
For the London financial district Canary Wharf in the former Docklands, where up to 120,000 office workers used to commute daily, the falling demand for office space is a challenge. The real estate company Canary Wharf Group is now considering painting a planned development of new office buildings and replacing them with houses 700 apartments to be built.
Home office is not a “new normal”.
The jobs of executives have also become more modest at the major New York banks. A little over a year ago, David Solomon, chief executive officer of Goldman Sachs, caused the bank’s management team to give up their offices on the 41st floor of Manhattan headquarters. The managers have moved to the twelfth floor, directly above the “Sky Lobby”, a popular meeting place for employees with a coffee bar. Solomon said at the time that this would give managers more opportunities to talk to other employees. Employees would also see more customers who are on their way to board members. After the move, the top executives at Goldman Sachs no longer have locked offices like they used to.
Citigroup has also switched to an open layout. When they moved their headquarters within Manhattan some time ago, the board members no longer got traditional offices. You now have workplaces with glass partitions. Many other employees in the building no longer have designated desks. The new layout was an initiative of CEO Michael Corbat, who was in office until February of this year.
The American banks have different ideas about the extent to which the Corona crisis will change the working environment in the long term. Goldman boss Solomon is an advocate of office culture, he recently called the home office “an aberration that we will correct as soon as possible”.
Working from home will not be a “new normal”. Citigroup’s new boss, Jane Fraser, recently said she was planning a hybrid model for most of the workforce, with employees in the office at least three days a week and up to two days in the home office. Jamie Dimon, CEO of JP Morgan, wrote in his letter to shareholders that future work depends on the position, but the bank will probably only need 60 jobs for 100 employees, and that will reduce its real estate needs considerably.
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