When Deutsche Bank opened a trading desk in Jacksonville 10 years ago, it enticed a small group of traders to move from its New York City office with a sweet offer.
Commit to stay for five years. Your position will be there in New York City if you want to return – following the commitment. But a funny thing happened. None of the 40 traders who moved here wanted to go back.
They enjoyed the less-hectic pace, the green space, the lower cost of living. And the apparent job security as the German bank upped its stake in its Jacksonville expansion, luring more employees to its lush campus on Gate Boulevard.
Everything seemed perfect. The local office grew to 2,250 employees, featuring trading and investment-banking operations. It has become the second-largest presence for Deutsche Bank in the U.S., outside of New York.
Then the announcement hit this week like a Category 5 hurricane. In a severe downsizing, one-fifth of Deutsche Bank’s 91,000-person global workforce will be eliminated. So what comes next is a secret.
A secret that local employees as well as city officials want to resolve. Deutsche Bank is the seventh-largest employer among financial firms in the Jacksonville area. So its presence has been felt; so would its sudden absence.
Northeast Florida has become somewhat of a financial mecca since the 2008 meltdown. Among the major operations here are Bank of America/Merrill Lynch, Citigroup, J.P. Morgan and Wells Fargo. They have been drawn by a booming economy and growing population, not to mention cheaper labor, lower rents and taxes, and desirable weather. It’s been an easy sell, particularly to harried Wall Street workers.
Around the expansive Deutsche Bank network, from its headquarters in Frankfurt to prominent offices in London and New York, employees are being handed severance packages. But nothing of the sorts in Jacksonville, at least yet.
The Jacksonville complex may make sense for Deutsche Bank. If the company is downsizing to reduce costs and improve profits, the Jacksonville operations fit into that scheme. For the same job, salaries in New York City are 40 percent higher than here.
And the complex in Jacksonville mirrors New York City. In fact, it is considered a microcosm – with every identical business represented. These businesses include corporate/investment banking, asset management, information technology and cybersecurity. Deutsche Bank does not run a retail bank in Northeast Florida.
The evolution has been impressive, considering it began with 100 employees in total who boldly came here in 2008. “There is no doubt the Jacksonville location for Deutsche Bank is critical from our global strategy perspective,” says a senior official.
A Jacksonville University economist believes the area can withstand even the loss of a large portion of the Deutsche Bank jobs. The economy in the Jacksonville area is strong enough.
“No matter what happens to Deutsche Bank, Jacksonville is going to be able to handle whatever changes occur,” says economist Carol Dole.
(Steve Nicklas, CRPC®, is a financial advisor with a U.S. brokerage firm who lives and works on Amelia Island. He is also an award-winning columnist. His columns regularly appear in weekly newspapers in North Florida and in South Georgia, and on his website at SteveNicklasMarketplace.com. He has published a book, “All About Money,” of his favorite columns from the past 20 years. The book is available at local stores and on Amazon. He can be reached at 904-753-0236 or at firstname.lastname@example.org.)