The following article is guest blogpost:
News that Credit Suisse setting up shop down south leads many to wonder if Wall Street might be moving away from New York. Other investment banks have chosen to shift from New York to cheaper locations over the last few years. Goldman Sachs opted to go to Utah while Morgan Stanley expanded its operations in Maryland.
Credit Suisse said that it would be adding more than a thousand jobs at its hub in North Carolina two months ago. This was after the state approved to give it close to $50 million in tax breaks. The move was an effort to lure the jobs from New York to North Carolina. Credit Suisse is in the middle of a restructuring after reporting losses for two consecutive years. They have already slashed 6,000 thousand jobs this year alone. It is expected that the number could rise given that they reduced the workforce by 7,000 people in 2016.
The announcement was made by Roy Cooper who is the Governor of North Carolina at the bank’s offices in Morrisville. Cooper observed that Credit Suisse had flourished in N.C for more than a decade and continued to have a strong presence. He added that he was encouraged to see that more jobs would be created in the state. Cooper said that this would lead to economic development across the state.
House Bill 2
The announcement was made at a time when the state had partially repealed a bill that infringed on the rights of members of the LGBTQ+ community. House Bill 2 was passed in March 2016 and resulted in the cancellation of expansion plans by several companies. PayPal and Deutsche Bank were some of the companies that halted their plans to expand operations in North Carolina.
PayPal had been planning to do so, but they became concerned when the “bathroom bill” was passed. Many critics were still not pleased with the changes that were made to the bill. They consider it play by the state government to stop the boycotts. The compromise bill gives the lawmakers more power because they are responsible for shaping the bathroom policies.
Gov. Cooper said that he had observed a change ever since the HB2 was replaced. He said that the many businesses that would not have come to North Carolina had decided to set up a shop there because of this. Events and organizations such as the ACC, the NCAA, and the NBA All-Star game chose to go with North Carolina this year.
Governor Cooper said that it was important for them to continue to fight discrimination within the state. The jobs shift by Credit Suisse is the largest expansion by a corporate since 2013 when MetLife Inc. announced that it would move more than 2,500 jobs from other areas.
Credit Suisse had also been considered Jersey City in New Jersey as another viable option according to reports. The city also has discretionary tax breaks. North Carolina was able to woo them with community college training and other incentives. The Swiss bank saw it fit to move some of its operations from New York City after the 9/11 terrorist attacks. The bank has 1,700 employees in the technological hub in the metropolitan area of North Carolina. Credit Suisse said that it would be investing a hundred million dollars towards the development of an information technology center in 2004.
The Research Triangle Park also has finance professionals. Credit Suisse has seen some hard times in the last few years. Urs Rohner is the Chairman of the bank. He said that they would be issuing shares to raise $4 billion to finance the restructuring. The Zurich-based bank has offices in other cities around the country including Houston, Los Angeles, and Chicago. The company is based in 50 countries. It employs close to 50,000 people. The expansion in Raleigh will be financed by a $70 million investment from the bank. The restructuring will take place over the next couple of years.