The New York Times recently published an articletitled “Financial Giants Are Moving Jobs Off Wall Street.” It detailed an emerging trend in which major Wall Street companies are taking swaths of on-site mid-level jobs and relocating them to less expensive locations. This phenomenon is known as “near-shoring.”
It’s easy to understand the rationale. The terrorist attacks of Sept. 11, 2001, the financial crisis of 2008 and the Dodd–Frank Act of 2010 have had a cumulative effect on many of these companies’ bottom lines, causing them to move much of Wall Street away from Wall Street in the name of lower overhead and reduced payroll costs.
While this turn of events might make Alexander Hamilton spin in his grave, it’s been a boon to other cities and states not traditionally thought of as financial hubs. It’s brought jobs and much-needed revenue to low-key places that have welcomed the infusion of business with open arms, tax incentives and cheaper real estate.
Which locations have Wall Street companies chosen for their mid-level operations? Read ahead to find out.
By Daniel Bukszpan
Posted 3 August 2012
On April 13, Delaware Gov. Jack Markell and Delaware Economic Development Office Director Alan Levin announced an infusion of 1,200 jobs into their state. The jobs came courtesy of an expansion plan by JPMorgan Chase, which already had thousands of jobs in Wilmington, the state’s largest city.
The Delaware Strategic Fund gave JPMorgan a $10 million grant for the expansion. Gordon Smith, the former CEO of card services, auto finance and student lending businesses for the company, said Markell’s administration had fostered a positive climate for the company. “JPMorgan Chase has a long and rich history here in Delaware and it is a great place to do business.”
Depository Trust and Clearing Corp. is among the many Wall Street companies that have moved some operations to the other side of the Hudson River. The company, based on Water Street in Lower Manhattan, recently announcedplans to relocate 1,600 of its employees to Jersey City at the beginning of 2013.
Another company with corporate offices in Jersey City is Knight Capital Group, which also maintains offices in Manhattan — at Exchange Plaza, adjacent to Wall Street, and on Park Avenue in midtown. (The company attracted unwanted attention after what it called a technology problemon Aug. 1 triggered unintended trades in scores of companies and resulted in the loss of millions of dollars.)
The Lone Star State has seen steady increases in financial sector employment, with a 56 percent increasein such jobs since 2000. One major Texas city that continues to see this type of job growth is Dallas.
According to the Bureau of Labor Statistics, Dallas’ local financial activities sector added 6,900 jobsbetween April 2011 and 2012. One of the many financial companies operating there is Goldman Sachs, which maintains an office at 100 Crescent Court in Dallas.
In addition to its Dallas office, Goldman Sachs maintains a presence all over the U.S., including in such cities as Boston, Chicago and Los Angeles. It also maintains a presence in such international locations as Europe, Africa, Asia and the Middle East.
Bangalore, India, was one of the cities that accounted for more than a thirdof the company’s hires in 2011 and 2012, according to The New York Times.
According to the Times, Goldman Sachs’ workforce in the New York area has remained flat for three years.By contrast, its Salt Lake City office has grown to 1,400 employees, making it the company’s sixth-largest office worldwide.
Utah Gov. Gary Herbert saidthe company receives economic incentives for operating in his state. "If you come and create economic expansion, you create a thousand jobs, you put more revenue into our income tax coffers, we will reward you by giving some of that money back," he said.
Deutsche Bank’s U.S. headquarters is at 60 Wall Street. Like many other financial companies, 2009 was a rough year that saw cuts of 500 jobsto its workforce. At the same time, staffing at its Jacksonville, Fla., office increased from 600 to 1,000.
The office, which opened in 2008, is the site for many of the company’s operations, technology and legal positions. Recently, traders with direct client contact began working there.
The Research Triangle area, also known as Raleigh-Durham-Chapel Hill, has been home to many financial sector jobs in recent years. These jobs used to be in the Manhattan offices of Deutsche Bank and Credit Suisse, but those institutions moved many of them south.
Apart from the cheaper real estate and workforce costs, there were other reasons for financial companies to move operations there. According to The New York Times, the state of North Carolina lured Credit Suisse with $14 millionin incentives.
The Bank of New York was founded by Alexander Hamilton in 1784. It’s hard to have deeper roots in the financial culture of Lower Manhattan than this institution’s. In 2007, it merged with the Mellon Financial Corporation and became BNY Mellon.
The company, headquartered at 1 Wall Street, has many locations around the U.S., including in Florida. Boca Raton is the site of one of the company’s numerous wealth managementoffices. Others are in Fort Lauderdale, Miami and Tampa.