Wall Street is on the move. Investment banks are migrating en masse from the narrow alleyways of Wall Street to Jacksonville, Florida. And as we previously reported, bulge-bracket firms are also continuing to flock to North Carolina and Salt Lake City.
As big investment firms face diminishing returns and increasingly hard-nosed regulation that is biting into their trading revenue, financial institutions are looking to save dollars by relocating to metro areas outside New York City and the North East.
Those who need to be most ready to pack their bags are employees with middle tier positions in accounting, trading, legal support, human resources and compliance, which are frequently being relocated to Salt Lake City, North Carolina and Jacksonville, Fla, according to an article in the New York Times.
By the end of 2012, Salt Lake City will house Goldman Sachs’ fourth largest office globally, according to the Salt Lake Tribune, which notes that the Wall Street titan will add 300 positions to its Salt Lake City office over the next few months, bringing its total in the city to 1,600. "They love Utah," Gov. Gary Herbert’s spokeswoman Ally Isom told the paper. "Salt Lake City is their second-largest U.S. office, their fifth-largest office in the world, and by the end of the year it will be their fourth-largest."
Goldman first opened a Utah office in 2000, and expanded rapidly after being offered multimillion-dollar tax-break deals with the state in 2007 and 2009, when Wall Street was struggling to navigate and survive the financial crisis.
The Salt Lake Tribune reports that with incentive packages offered in both years, Goldman is set to receive as much as a $47.3 million break over a 20-year period in the form of a tax rebate, according to Michael Sullivan, a spokesman for the Governor’s Office of Economic Development.
In exchange for the incentive, the bank agreed to maintain at least 1,065 employees in Salt Lake City and pay them at least 150 percent of the average local county wage.
Many of the new jobs are being assigned to Goldman’s investment management business and back-office functions such as accounting, Goldman’s New York-based spokesman David Wells said.
Meanwhile, Deutsche Bank has been actively increasing its staff in Jacksonville, Fl. Since the end of 2009, the bank’s work force in the New York area has dropped to 6,900 from 7,400, while its staff in Jacksonville rose to 1,000 from 600, the New York Times reports.
The bank initially approached Jacksonville for incentives in 2008 to support its plan to create operations and technology jobs, according to local paper The Daily Record.
The firm said it planned to create 1,000 full-time jobs by Dec. 31, 2011, that would pay an annual average wage estimated at $49,200, plus benefits, for an estimated annual payroll of $49.2 million, according to the daily. It also planned to invest $12.1 million in technology infrastructure and tenant improvements.
While the firm’s Jacksonville office started out in 2008 as a back-office service center, it has since been actively adding jobs in technology, legal, compliance and trading departments.
Also ramping up operations in Florida is Bank of New York Mellon, which reportedly cut 350 jobs in New York City while hiring 150 people in Lake Mary, Fla.
Credit Suisse has also been boosting its operations outside New York. While its workforce in the big apple has dropped by 500 in the last four years, the firm has added 450 positions in what is known as North Carolina’s Research Triangle - the area of Raleigh, Cary, Durham and Chapel Hill, the New York Times reports.
Deutsche Bank also employs 160 financial markets professionals at its technology center in Cary, NC and expects to create more than 300 full-time positions in the next few years.
North Carolina reportedly provided Credit Suisse with roughly $14 million in incentives to bring the company to the state. In addition to cost savings compared to New York and state incentives, financial firms are also reportedly motivated to ramp up their operations in North Carolina as the state boasts some of the best universities in the country, including Duke University and the University of North Carolina, as well as North Carolina State, whose department of Computer Science has an alumni base of more than 6,200, according to eFinancialCareers. [For more on Wall Street jobs, read: 2012 Salary Survey Shows IT Skills Remain In Short Supply On The Street.]