New York edge as a financial hub is yet again at risk as Goldman Sachs Group Inc. (NYSE:GS) contemplates moving one of its key divisions to Florida. According to reports, the financial conglomerate is in the process of relocating its $8 billion revenue-generating asset management arm to the Palm Beach County of Fort Lauderdale.
Goldman Sachs Plans
The financial juggernaut has been checking out potential real estate, having also opened discussions with local officials and weighing the tax advantages on offer in the state. However, Goldman Sachs is also reportedly considering Dallas and Texas for the asset management division.
Success in operating remotely in the aftermath of the pandemic has reportedly influenced executive decisions in moving the division to Florida. According to the executives, relocating some of the roles out of New York should help the investment bank save some money.
Goldman intends to save up to $1.3 billion as part of an ambitious cost-cutting drive unveiled early in the year. Conversely, shifting employees to cheaper locales has emerged as one of the plays. In recent years the firm has expanded its office places to cities like Dallas and Salt Lake City as part of an effort of trimming expenses.
New York Exodus
Goldman Sachs’s move comes hot on the heels of a number of companies shifting base from New York in a bid to take advantage of tax benefits elsewhere. Hedge Fund Elliot Management is in the process of relocating its headquarters to Florida, Carl Icahn having also made the switch. The COVID-19 pandemic has all but accelerated companies’ resolve to exit New York.
New York’s economy has taken a significant hit, given the ever-growing loss of white collar jobs. As it stands, there are more empty office space in Manhattan than there were in the aftermath of 9/11. Florida has emerged as an exciting investing hub thanks to the tax advantages on offer as well as the warmer weather. The lack of income tax is also believed to be one of the factors that is enticing wealthy Americans and corporations to set base in the state.