'If you can go out to eat, you can come back to work': Morgan Stanley CEO wants NYC staff back in the office full time by Labor Day and anyone who does NOT could face a salary cut
Morgan Stanley CEO James Gorman has said he expects all New York City staff to return full-time to the company's Times Square home office by Labor Day - and if they don't they may face salary cuts.
Gorman was speaking at the firm's annual U.S. Financials, Payments & CRE Conference on Monday afternoon when he made the remarks, some of the strongest indicators yet of how big business will handle getting their staff back to work in person now that COVID cases are falling, vaccines are up and New York City is returning to pre-pandemic norms.
The firm hires more than 63,000 people around the world and the HQ in Times Square has 42 floors but it's unclear exactly how many employees will be expeced to return in September.
Right now, Morgan Stanley still isn't dictating how many days a week staff should come in, but Gorman says that'll change if people don't choose to return to their office in Times Square by the end of the summer.
'I would call it directionally strong without dictating - yet.
'But [by] Labor Day, I'll be very disappointed if people haven't found their way into the office and then we'll have a different kind of conversation.'
He goes in four days a week right now and has been in at least one day a week since last summer.
While Gorman says the bank will continue to afford some flexibility to families whose kids can't get back to school or camp over the summer, he's ready to crack the whip in September if met with resistance from people who don't want to come in.
'Make no mistake about it - we do our work inside Morgan Stanley offices, and that's where we teach, that's where our interns learn, that's where you build all the soft cues that go with building a successful career that aren't just about Zoom presentations.
'When will that occur? My leadership style has been very deliberate. I went from one day a week from July to Labor Day last year, two days Labor Day until the end of the year, three days the beginning of this year until March and now I am at four days.
'If you can go into a restaurant in New York City, you can come into the office. We want you in the office,' he said.
His comments come after Morgan Stanley in April reported $4.1 billion in profit for the first three months of the year. Its revenue during that time rose 61 percent vs. the prior year to $15.7 billion - a record.
Morgan Stanley CEO James Gorman said on Monday he expects all New York City staff to return to the office full time by Labor Day
New York City is alive but many of the city's office towers remain empty since staff have been allowed to continue working from home. Pictured, diners in Brooklyn on May 19, indoors, eating without capacity restrictions
Businesses in NYC are allowed to welcome back 100 percent of their staff, without social distancing, if they can ensure that everyone is vaccinated.
If they can't ensure that everyone is vaccinated (and it's up to each business whether or not they make vaccines mandatory), they must enforce social distancing or put barriers between workers.
Both the Mayor of New York City and Governor Andrew Cuomo have declared the city reopen, with subway services now operating at pre-pandemic levels again.
The apartment rental market is starting to show slow signs of recovery (April was the first time the monthly median rent had increased since last year) and there are no restrictions on domestic tourists who want to come to the state and city for a visit.
All remaining COVID rules (like masks on public transport, in taxis and capacity rules for where vaccines can't be verified) are likely to be lifted soon, when the state reaches a 70% vaccination rate.
On Monday, 69.9% of the state had been vaccinated and everyone over the age of 12 can get vaccinated across the country.
Gorman didn't specify if staff will face termination if they don't come back, or if anyone will be exempt.
He warned that anyone who had hoped to still collect a New York salary after relocating to work remotely could think again.
'There'll be more flexibility because we've learnt we can function with flexibility but that doesn't mean, "hey it'll be Monday, Wednesday and Friday and I'm in Florida."
'If you want to get paid New York rates, you work in New York.
'None of this I'm in Colorado getting paid like I'm sitting in New York City. Sorry that doesn't work,' he said.
Morgan Stanley also hasn't forced any staff to come back in yet at all, whereas Goldman Sachs brought back most staff on Monday morning.
He said that 90 percent of the staff who are coming into work are vaccinated and that by Labor Day, he expects the number to be 98 percent.
If people don't want to get vaccinated for health or religious reasons, he says the firm will enter HR discussions with them.
He is also affording some flexibility to parents whose kids can't yet go to summer camps or back to school full-time.
'Listen, everybody has taken a slightly different posture. My view is firstly we're a very global firm.
'We have 10,000 employees in India, they're in the worst part of COVID right now.
'They are not coming back to work. That's not a 2021 issue.
'We have 1,000 people in Glasgow - the UK is still coming in and out of lockdowns every few weeks.
'Then we have lots of people in markets that are completely COVID free. So I don't think issuing a blanket statement to all employees is helpful.
'I don't think speaking to employees who work at 1585 Broadway in Times Square is the same as speaking to people working in a small office in Topeka.
'A more nuanced communication is necessary.
'I allow for the fact that we have some flexibility; if families haven't been able to get their kids into camp, they have to deal with that reality - let's not be dictatorial.
'When the vaccines weren't ubiquitous, we had to deal with that reality. Now they are,' he said.
Gorman had COVID last year and recovered.
He later partnered with a healthcare firm to give workers' vaccines in the office.
In NYC, 70 percent of people are vaccinated and cases continue to drop; across the state of New York on Saturday, just 0.5 percent of people tested were positive and there were only 158 cases in NYC - just 0.001 percent of the population.
Mayor Bill de Blasio says all public schools will return to a full-time, in person learning schedule in September. Private schools can decide for themselves which approach to take.
It comes as other white collar sectors report struggles in getting people back to work.
In New York City and San Francisco - two enormous business hubs where the office workforce keeps almost every other part of the local businesses going - only 21 percent have come back to the office.
Cities in Texas, however, have managed to get more people back in; in Austin, Dallas and Houston the return rate is nearly 50 percent, according to Kastle Systems, an office-security company.
They monitored the key-card swipes in their 2,500 buildings across the country to get the data. It was reported by The Wall Street Journal on Tuesday.
It may be down to the fact that people in Texan cities use their own cars to get to work more than they rely on public transport, but it could also come down to local restrictions and advice.
In April, rents in Manhattan increased by $14 to an average of $2,799. In Brooklyn, they remained at $2,400. In Queens, they rose by $50 to an average of $2,050. It's a far cry from pre-pandemic levels but it marks an increase for the first time
COVID cases in NYC have been steadily falling since March. There were 158 on Sunday which is less than 0.01 percent of the city's population
Conversely, the city's vaccine rollout is storming ahead - nearly half are now fully vaccinated and across the entire state of New York, the number is nearly at 70 percent
Since the start of the pandemic, people in Republican cities and states have been less frightened of going back to work or even staying in the office throughout the pandemic. California and New York have been among the strictest in imposing lockdowns and rules.
Now, major businesses are trying to find ways to get people back into the office full-time.
Some HR departments are cautious about telling parents to come back before their kids' childcare or in-school learning resumes.
'Women are absolutely nervous about it.
'I’m seeing the HR and business leaders at banks recognizing, understanding and starting to plan around fairness in evaluations,' Rob Dicks, Accenture Plc’s talent and organization lead for capital markets, told Bloomberg on Monday.
Accenture hasn't yet dictated how much staff should come in.
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