Goldman Sachs has suspended plans to move key operations from the US to London because of the uncertainty created by the vote to leave the EU. The Wall Street firm – in the midst of building a new £350m London headquarters – had been preparing to shift more of its global operations and IT activities from New York, but now appears to have embarked on a hiring freeze.
The warning from Goldman came as other major City employers used the Davos summit in Switzerland to warn that jobs would have to be moved from London.
HSBC’s chief executive, Stuart Gulliver, has reiterated that 1,000 roles will “move in about two years’ time, when Brexit becomes effective”, while the Swiss bank UBS has acknowledged that 1,000 of its 5,000 staff could shift, possibly to Frankfurt or Madrid. The Swiss bank is said to have held talks with the Spanish authorities about moving 300 roles to Madrid, although the finance ministry said it would not comment on private meetings.
Jamie Dimon, boss of JP Morgan, which has already warned that 4,000 UK jobs are at risk, said on Wednesday: “It looks like there will be more job movement than we hoped for.”
Amid speculation about the number of jobs that Goldman could shift out of London, the bank’s chief executive, Lloyd Blankfein, said New York was already proving the winner from the early Brexit fallout. “Operating our business to maximise our global potential, we were trying to get as much into the UK as we could. So if a business needed to be done in the UK, it was always there,” he said. He added that the UK time zone had always been a big advantage: “You wake up with Japan, you go to bed at the close in New York.”
“We were on track to move more and more of our global activities – global ops, global technology – all those things made and more sense to operate out of [the] UK. Now we are slowing down that decision,” Blankfein told Bloomberg TV in Davos.
Top bankers met Theresa May in Davos on Thursday and the prime minister told Bloomberg TV she wanted “to ensure that we can keep financial services in the City of London”.
Blankfein’s remarks come amid speculation that the bank could shift half of its 6,000-strong workforce out of London, 1,000 of whom would be relocated to Frankfurt.
A Goldman spokesman in London insisted no decision had yet been taken: “We continue to work through all possible implications of the Brexit vote. There remain numerous uncertainties as to what the Brexit negotiations will yield in terms of an operating framework for the banking industry. As a result we have not taken any decisions as to what our eventual response will be.”
The bank is continuing to press on with building its new nine-storey London HQ behind the two buildings it currently occupies, with the aim of moving in in about 2019. The bank has the option to take all the floors or sublet it to tenants.
On the six-month anniversary of the referendum, Mark Boleat, policy chair of the City of London Corporation, warned that City firms were delaying investment decisions. “Important strategic business decisions are being delayed. Firms’ nervousness can only be allayed if they know how they can continue running their business. A transitional arrangement should be agreed as soon as possible,” he said.
