HSBC plans to cut its office footprint by 20 percent this year — a move raising questions about the future of the office. The investment bank told Bloomberg Television that it is budgeting for just half of its previous business travel costs as well.
The bank already committed to reducing its office space by 40 percent in the future and announced that more than 1,200 of its United Kingdom-based call center workers would permanently work from home in early April.
The plans for reduced travel and office space comes after many business leaders are questioning what working will look like after the coronavirus pandemic, and how reduced office space will change cityscapes. And HSBC isn’t the only bank ditching some of its portfolio as it leans into more remote work.
JPMorgan Chase, the largest private tenant in Manhattan, said remote work would “significantly reduce” its need for real estate, and is already is looking to sublet 700,000 square feet at 4 New York Plaza in the Financial District and more than 100,000 square feet at 5 Manhattan West in Hudson Yards.
HSBC also plans to replace some business trips with video conferences — technology that the bank has grown used to during the pandemic — and when bankers do travel, they will go on fewer but longer excursions, HSBC CFO Ewen Stevenson told Bloomberg.
As HSBC implements its strategic shift to focus on the Asian market, its real estate portfolio is more likely to change in London than Hong Kong, but CEO Noel Quinn reaffirmed the bank’s commitment to the U.K., reported Bloomberg.
It’s unclear if an HSBC pivot to less in-person work would mean a reduction of the bank’s presence in New York. HSBC’s U.S. headquarters, located in HSBC Tower at 452 Fifth Avenue, takes up 548,000 square feet of office space in Midtown South, and the bank’s lease is scheduled to be up in 2025, The Real Deal reported.