Citigroup Going Hybrid, Further Complicating the Office Market’s Future
The third-largest U.S. bank wants a better work-life balance for employees, CEO Jane Fraser says
Most Citigroup (C) employees will work up to two days remotely per workweek once the nation’s third largest U.S. bank by assets returns to the office. That’s according to an internal memo from Citigroup CEO Jane Fraser first reported on CNBC.
Manhattan-based Citigroup joins numerous other companies instituting some form of a hybrid work model going forward, with at least some employees working remotely for part of the workweek. Others adopting hybrid work models include Adobe, Prudential Financial, Morgan Stanley, The New York Times Company, and Facebook. The home-office balance varies for each of these and other firms adopting hybrid. But all embrace the idea that the 9-to-5, five-day, office-based job is dead.
Citigroup, for its part, is basing its hybrid decision on things such as employees’ ability to collaborate and mentor as well as on how the company can best foster its internal culture and compete with other banks.
“That said, we also recognize that our people have benefitted from aspects of working remotely, and we intend to create additional flexibility going forward,” Fraser said in her memo. “While some roles require the sharing of information in real time, many others have proven to be equally and, in some cases, more productive from home.”
This idea of partially remote, of course, complicates things for commercial real estate (as does the move by a smaller handful of companies, including Twitter, Spotify and Salesforce, to allow work-from-home for everyone permanently). The coronavirus pandemic emptied offices starting in spring 2020, with most landlords and leasing brokers anticipating a return by Labor Day … then by New Year’s … then by this spring.
Now, though, with returns expected to be just a step or two behind vaccine rollouts over the next few months, and with a growing number of firms embracing that hybrid model, it’s unclear how much post-COVID demand there will be in the office market compared with how things were before the pathogen struck.
Recent stats suggest demand for office space is picking up. But most analysts and their analyses suggest the office market in places, such as New York, L.A. and Washington, D.C., won’t return to anywhere near where it was pre-COVID, in terms of demand, until at least 2023. That likely means fewer leases and cheaper rents. Workers are fine with this, by the way: A recent survey commissioned by brokerage JLL (JLL) found that nearly 3 in 4 workers wanted to be able to work remotely more.
As for Citigroup, it’s unclear if its adoption of hybrid will mean less office space, including at its global headquarters at 388-390 Greenwich Street in Lower Manhattan. Also, the move likely does not apply to data center or bank branch employees, per Fraser, who cast her announcement as part of a larger effort to restore some calm to apparently tweaked-out employees.
The company is for the second year in a row hosting a firm-wide holiday called “Citi Reset Day” on May 28 this time with more advance notice so employees can plan and it’s banning internal video meetings on Fridays (though not conclaves over the phone). Also, some jobs at the bank, which employs 210,000 people, will remain completely remote, according to CNBC.
“The blurring of lines between home and work and the relentlessness of the pandemic workday have taken a toll on our well-being,” Fraser said in her memo. “It’s simply not sustainable. Since a return to any kind of new normal is still a few months away for many of us, we need to reset some of our working practices.”