In its first Brexit-related mass communication to its 16,000-strong workforce in the UK this year, JPMorgan highlights the organisational and strategic challenges facing global banks as they prepare for Britain’s European Union exit.
It comes a day before Prime Minister Theresa May is due to host crunch talks with ministers at her country residence Chequers on how she wants to shape Britain’s future trading relationship with the soon-to-be 27-member club.
Signed by Daniel Pinto, chief executive of JPMorgan’s Corporate & Investment Bank and Mary Erdoes, chief executive of the bank’s Asset & Wealth Management division, Thursday’s email also outlined JPMorgan’s plans to beef up its presence in other EU cities including Paris, Madrid and Milan.
Until now, the Wall Street heavyweight was broadly expected to focus on expanding its Frankfurt, Luxembourg and Dublin bases, where it already holds banking licenses.
A spokesman for JPMorgan confirmed the authenticity of the memo, which was also sent to its staff in continental Europe, Middle East and Africa, but declined to comment further.
The staff who have committed to leave Britain before “Brexit Day” on March 29, 2019 primarily work in client-facing or risk management roles in both the investment bank and asset management divisions.
The memo also said JPMorgan expected to migrate or add “a few hundred roles” to the EU-based headcount by that date and it had already started recruiting for key positions, but relocations could happen more gradually if a suitable transition deal was confirmed.
The total size of its EU workforce, however, “was entirely dependent on whether an agreed transition arrangement is finally confirmed.”
“Just as we are working to minimize disruption for our clients, we are looking to do the same for our people,” the memo said.
“We want to avoid affecting the lives of employees and their families with changes that could prove to be unnecessary or premature, as long as political negotiations and regulatory outcomes remain unclear.”
Slow progress in post-Brexit negotiations with Brussels has raised fears of a so-called “hard Brexit” that would cause major disruption to global banks who run their European businesses from Britain, home to a thriving financial services industry and hubs for bond, equity and currency trading.
With an October deadline on the trading relationship between Britain and the EU just weeks away, banks have little idea how many EU staff they will need to maintain relationships with EU-based governments, companies and investors.
About 5,000 finance jobs will be shifted out of Britain or created overseas in the next few years if it is denied access to Europe’s single market, half the original forecast, a Reuters survey in March found.
Shortly before the June 2016 referendum, JPMorgan chief executive Jamie Dimon suggested the bank could move thousands of jobs out of London if Brexit talks failed to deliver a good outcome for the financial services sector.
But a letter sent to shareholders in April showed the bank’s leadership remains open-minded about the impact on its operations, with a much larger number of job relocations seen just as possible as staying “exactly as we are today”.
“What we do not know — and will not know until the negotiations are complete — is what the end state will look like,” Dimon’s letter said.
Editing by Silvia Aloisi and Alexander Smith