Brexit was a bit of a shock for many, but London, a staunchly “remain” city, was affected more than most.
You see, London has a lot of international companies residing in it. Moreover, it is a hub for many businesses who see it as a gateway into the rest of Europe.
So, the stories of how London will see an exodus of large businesses are now making the rounds. They’ve now gone from “this might happen” to “this is now happening,” as companies decide that rather than wait for the outcome of any talks, they need to plan ahead.
JPMorgan had threatened before last year’s vote that if we were to leave Europe, it would move some of its financial staff.
This makes sense.
It deals with many aspects of currency and finance, and it needs simple and efficient access to Europe, the single market, and the euro. There is some debate as to whether Britain will still have access to these when the two year negotiating period is up, and so, like many banks, it sees potential disruption.
Disruption costs money and therefore trying to mitigate for it is a big issue.
Well, it was recently reported that it’s no longer a threat, they do indeed intend to move some of their staff as reported by Bloomberg.
They have already decided that they will move some of its operations to Dublin and Luxembourg, meaning 500-1000 staff will have to be relocated.
But JPMorgan is not alone.
Another 20 banks are also looking to move their operations, or at least open up offices on the European mainland, including Goldman Sachs, Citigroup and Credit Suisse.
Altogether, it’s estimated that just in this industry alone, at least 9,000 jobs could be moved out.
That’s a lot of empty office space.
Could this be the end of London?
Of course, London has seen incredible growth over the past few decades.
It’s predicted that its growth will continue, and it will outstrip New York over the next few years, and so regardless of your views on Brexit, there is still some cause for optimism.
The city is seen by many as the financial capital of the world, but maybe that will change.
Maybe a new growth boom will come as more technology-based companies take up residence here and use London’s geographical links and its savvy population as a reason to invest?
One such company that doesn’t seem to think Brexit is an issue is the technology company Slack, which has recently opened a new office in the city.
“Brexit or no Brexit, London is still London, and the U.K. is still the U.K.,” Slack’s Chief Executive Officer Stewart Butterfield said in an interview on Bloomberg Television.
Although with only five employees in London at the moment, they intend to grow to 20 by the end of the year. Of course, that’s nothing compared to the 9,000 figure who could be leaving, but Slack started with only 30 employees in 2014, and it now has over 800. If they can maintain growth, they show the way for others.
And they’re not the only ones.
Last November, Facebook hired 500 city staff and names London as its International hub, and Google plans to expand by another 3,000 staff very soon.
What does Brexit mean, then?
At the moment, it’s fair to say that regardless of your political leaning, nobody really knows what’s going to happen to London when we finally leave the EU.
Although some have been saying it’s the end of the city as we know it, others have pointed to the increased and continuing investment by large firms.
It seems it’s too early to write the city off quite yet, and one thing’s for sure, although it really doesn’t help us in the office services industry, tourism is getting a welcome boost due to the suppressed pound!