The COVID-19 pandemic it is said will change forever the way companies operate, with more people working from home or remotely.

No longer will there be a demand for office space or large commercial properties.

JPMorgan Chase & Co. one of the world’s largest financial services entities, has taken the decision to significantly reduce its office space and have some of its staff work on part-time shifts or work from home.

Earlier this year, JPMorgan began marketing 700,000 square feet of office space in Manhattan as it makes a concerted effort to shed office space.

FINANCE HOUSES SCALING BACK REAL ESTATE FOOTPRINT

With JPMorgan and other big banking players abandoning its offices, New York City’s financial district is turning into a ghost town. It will be a real tough time for commercial real estate developers as office culture undergoes a radical revolution.

Many companies may settle on a compromise of a hybrid workplace. The big finance houses are now subletting their offices and scaling back their real estate footprints.

JPMorgan has discovered that it can now drastically reduce its utilities and other operating costs, which is a drag on earnings. Also, the new way of working means spending more time at home and less time in the office.

In his annual message to shareholders, released earlier today, JPMorgan CEO Jamie Dimon wrote: “Remote work will change how we manage our real estate. JPMorgan will shift to a more open seating arrangement for office space and shared space such as conference rooms.

“As a result, for every 100 employees, we need seats for only 60 on average. This will significantly reduce our need for real estate. Some employees will be working remotely part of the week and a small percentage of employees, maybe 10 per cent, will work from home full time for specific roles.

“In all cases, these decisions depend upon what is optimal for our company and our clients and we will extensively monitor and analyse outcomes to ensure this is the case. Of course, we will also continue to reopen following health authority and government guidelines and our own established processes.”

JP Morgan occupies close to five million square feet of real estate in Manhattan.