State Street has become the latest in a long line of businesses (and residents) that have fled New York City.
The company is ditching two of its NYC office locations, according to Bloomberg, citing Dow Jones. State Street is based in Boston, but executives said they wouldn't be returning to satellite offices in Midtown Manhattan, even as employees return to normal "pre-Covid" work arrangements.
The company is instead going to sublease its two offices, which are located near Rockefeller Center, to other companies, the report notes. The decision to not return to the NYC offices will affect "more than 500 employees" from both the firm's custody bank and money management business.
For its NYC-based employees, State Street is offering the option to work in either their New Jersey or Connecticut offices. The company is allowing different employee groups across its company determine what mix of in-person and in-office work they want to take on.
The company also secured some co-op work space in Manhattan for those who may want to use it.
Recall, we wrote just weeks ago that most Americans would take a 5% pay cut to be able to work from home. In addition to just taking a pay cut, many respondents to a new survey said they would also "give up days off or put in more hours" in order to be able to keep working from home.
State Street follows numerous other businesses that have defected from Manhattan - either due to high taxes, crime, Covid, or a mix of all three.
We noted at the beginning of 2021 that Virtu Financial had left. It's a trend that started in 2020 when we first reported that Citadel had set up a makeshift trading floor at the Four Seasons in Palm Beach. Back then, the thought process was to get out of crowded areas due to unknowns about the pandemic.
As the year progressed, and eventually turned into 2021, companies and executives have continued to leave places like California and New York (and their liberal political leaders) in favor of lower taxes and less regulation in places like Texas and Florida. Companies like Elliot Management and Goldman Sachs have also moved some offices to Florida.
Chief Executive Officer Doug Cifu commented early this year: “Why am I forcing 400-odd people to schlep to lower Manhattan? I hate it, and I’m the CEO -- I don’t have a boss, I don’t have to be there on time. Can you imagine the other 399 people? They must hate it much worse than I do,” Cifu concluded.
“Doing business in Florida is more inviting and more welcoming. There are parts of the political class in New York and New Jersey that just don’t value the jobs and the industry.”