JPMorgan has announced that it will require fewer office spaces after the pandemic as more staff will work from home in part-time positions.
Boss Jamie Dimon wrote in a shareholder letter that the firm will require 60 seats per 100 persons.
The decision to keep more staff at home is a somewhat expected one.
During the pandemic, many private firms and companies have been forced to improve their technological systems so that they could continue operating during the lockdown.
Because of this, firms now have access to video conferencing apps such as Zoom and many workers have now been used to working at home and this new way of life.
This means that some workers may prefer to work at home as it is a more comfortable environment, thus making them happier and more productive.
However, the likelihood is that many workers would have seen a decrease in their personal output as at home they are more likely to be distracted or perhaps lazy.
Nevertheless, office spaces cost money and having workers working from home despite the decreased output levels is a worthy tradeoff for some firms.
So, JPMorgan’s decision to have some workers - perhaps the most productive ones - work from home, and the others stay at work, has been made to decrease fixed costs from renting office spaces as well as to maintain optimal levels of output.
However, due to JPMorgan doing this, it can be assumed that other major banks and financial offices will soon follow this trend, so, we may see a large increase in vacant office spaces.
This will likely pose a threat to the UK Economy, as well as other economies around the globe as offices are typically situated in town centres.
This is significant because workers are the reason why town centres typically have high levels of footfall, well-off office workers like to have their expensive coffees and other luxuries, and as a result, a Starbucks opens down the road to their office.
However, with the closing of more and more physical office spaces, which there is no need for, town centres will see a large reduction in demand for their services, and, as a result of this loss of demand, structural unemployment may occur.
This will pose a problem for the UK economy as the low-skilled individuals who will be unemployed as a result of the potential collapse of the high street will lead to a large number of wasted resources.
And, due to these workers being low-skilled as well as there being no work available for them due to the collapse of the high-street, the unemployment will likely be long-term, making it a massive issue for the government.
Consequently, the government may be forced to intervene and to enable these individuals to get back to work, they may have to pour additional resources into higher education for adults to make it easier to upskill.
However, the low-skilled workforce is not the only worry the UK government has, JPMorgan also announced their departure from the UK into Europe, and, if more financial businesses follow this, the UK will be in danger as the nation will lose one of its main sectors and areas of specialisation.
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