James Gorman is hesitant to make predictions about the future with so much about the coronavirus pandemic still uncertain. One thing is clear, however: Morgan Stanley will have “much less real estate.”
“We’ve proven we can operate with no footprint,” Gorman, the firm’s chief executive officer, said in an interview Thursday with Bloomberg Television. “Can I see a future where part of every week, certainly part of every month, a lot of our employees will be at home? Absolutely.”
It’s an early glimpse of the longer-term changes Covid-19 holds in store for an economy that largely has been operating under stay-at-home orders for weeks. And it could spell tough times for commercial real estate in business centers with dense populations such as London, New York and Hong Kong.
On Wall Street, open for business because finance is considered an essential service, most employees are working out of their houses, apartments or, in many cases, vacation retreats. In Morgan Stanley’s case, 90% of the firm’s 80,000 employees are working from home.
Gorman, 61, had run the bank from self-isolation while recovering from the coronavirus. He said he’s surprised that a firm as complex as Morgan Stanley has been able to function “extremely well” with so much of its workforce off site.
“That tells you an enormous amount about where people need to be physically,” he said in the interview after Morgan Stanley announced first-quarter results.
“I’m still a huge fan of mentoring, bonding and having teams together and the creative surges that come from having people working together,” Gorman said.
It’s clear that these comments are a response to the serious realities that we are living in. Morgan Stanley has had several bouts of COVID-19 in their own wealth management offices in California and New York. Rethinking how offices work, how they are ‘spaced’, and the value that will provide in protecting both clients and employees – they need to get it right.