JP Morgan Chase & Co (NYSE: JPM) has plans to shift 2,150 IT jobs from New York to New Jersey as a component of a larger cost reduction plan. All three New York City offices will be affected. The expansion crossing the Hudson River will take advantage of the $19 million subsidy given by the New Jersey Development Authority. The benefits of this subsidy will be distributed over a period of 10 years. For JP Morgan, this event marks their second round when it comes to tax credits in a year. The Jersey Government has taken this step to propel the growth of jobs in Hudson County City.
The figures for New Jersey tell the other part of the story: unemployment was 6.5 percent in May. In contrast, the unemployment figure for New York is 5.7 percent. When the whole US is taken into account, it is 5.5 percent. These figures are released by US Bureau of Labor Statistics.
For JP Morgan, this Jersey City relocation will help to save approximately $188 million when it comes to tax benefits, spread over 10 years. According to a knowledgeable informant, this move is slated to occur in the middle to late period of 2017. The informant even identified the property as 545 Washington Blvd and added that such tax benefits must pass approval.
The biggest American bank in terms of assets, JP Morgan is trying to slash expenses by transferring back office employees to much cheaper locales like Florida, New Jersey and Ohio. The move becomes imperative as bank revenues stagnate all over the industry. It is an even possibility that workers in New Jersey will be a consolidation of employees from midtown Manhattan, Brooklyn and financial district facilities.
New Jersey has aggressively offered tax credits to any companies thinking of moving to the state. The government has also encouraged firms to continue operating from there. Approximately $5 billion worth of corporate tax subsidies were awarded from the time the present governor, Chris Christie, a Republican, assumed the chair in 2010. A number of other financial companies who are recipients of such tax credits include Principis Capital LLC, Brown Brothers Harriman Co, RBC Capital Markets, Fidelity Global Brokerage, Jackson Hewitt Co. and New York Life Insurance Co.