BOSTON/NEW YORK—Asset management firm Fidelity Investments on Monday said it had paused some voluntary return-to-office plans while Morgan Stanley’s CEO said he expects COVID-19 to be an issue through the next year, in a further sign that America’s financial industry is rethinking its return to “business as usual.”
U.S. financial firms have been more proactive than other industries in encouraging employees to return to offices.
Those plans have come under renewed scrutiny with COVID-19 cases again on the rise and as the Omicron variant of the coronavirus spreads swiftly. Some financial firms are now choosing to pull back on holiday parties, recommend booster shots, or even advise returning to work from home.
“The private acknowledgement is that return to work plans set for January need another look,” said Neal Mills, chief medical officer for professional services firm Aon, who advises corporations on their return-to-work plans.
Mills said he received calls every day last week from companies experiencing COVID-19 outbreaks seeking advice on whether to delay bringing employees back or reinstate mitigation measures, like social distancing. Cases surged after Thanksgiving, and are expected to continue rising and peak in January, he said.
Family-controlled Fidelity, headquartered in Boston, paused pilot return-to-office programs at its offices in Boston, Smithfield, Rhode Island, and Merrimack, New Hampshire “due to rising COVID risk scores,” spokesman Michael Aalto said.
COVID-19 hospitalizations in Massachusetts rose by 58 percent in the two weeks to Dec. 9, according to data from state authorities, their highest level since February.
Several hundred people had been going in to those New England locations, Aalto said, adding that voluntary programs representing thousands of employees are still underway at other locations around the United States.
Last week, Wall Street investment bank Jefferies sent staff home and canceled client parties and all but essential travel after the firm experienced nearly 40 new COVID-19 cases.
Morgan Stanley Chief Executive James Gorman said in a CNBC interview on Monday that while the bank had about 65 percent of its 95 percent vaccinated staff in New York in the office, and the trading floors had hundreds of staff on them, the pandemic’s impact was taking longer to recover from than he anticipated.
“We are in transition period still,” Gorman said. “I thought we would be out of it by Labor day, past Labor day. We’re not. I think we will still be in it through most of next year. Everyone is still finding their way.”
Gorman has been vocal in support of getting staff back to the office. At the firm’s U.S. financials, payments, and commercial real estate conference in June he said, if “you want to get paid New York rates, you work in New York”.
He told CNBC that if staff wanted to move en masse to a low cost part of the country “that creates issues” but that his employees had not reacted that way.
Daily cases in New York City have surged this month and hospitalizations are at their highest level since April, according to the U.S. Centers for Disease Control and Prevention (CDC).
While the Delta variant is still dominant in the United States, Omicron has been detected in many U.S. states, including New York.
In London, major investment banks have advised most staff to work from home as of Monday, in line with Britain’s tighter restrictions, but said their offices will remain open. At least one person has died in the United Kingdom after contracting Omicron.
The shift represented a switch for many firms in Europe’s largest financial capital as, until last week, most were encouraging staff back into the office.
“We expect a reduction in the amount of people coming into our offices, but our buildings will continue to be accessible to all employees,” JPMorgan said in a memo to UK staff late last week.
Goldman Sachs International Chief Executive Richard Gnodde said in a memo on Friday that all UK staff who could work from home “effectively” should do so, but added its offices in London and Birmingham also would remain open.
Deutsche Bank has said that staff numbers in London will be significantly reduced from Monday, though employees with certain roles such as traders or those with personal reasons can still go in. It also discouraged staff from taking part in social gatherings.
By Ross Kerber, Elizabeth Dilts Marshall, and Matt Scuffham