Goldman Sachs to move hundreds of staff out of London due to Brexit

Goldman Sachs is to start moving hundreds of staff out of London before a Brexit deal is struck, the bank’s European boss has confirmed.

Richard Gnodde, chief executive of Goldman Sachs International, said on Tuesday the decision to relocate workers was part of the bank’s contingency plan for the UK leaving the EU. “We are going to start to execute those contingency plans”, he told CNBC.

Gnodde said the bank, which employs 6,000 staff in the capital, would take extra office space in Frankfurt and Paris. Speaking a week before Theresa May will formally being the UK’s exit from the EU by triggering article 50, Gnodde said: “We start with a significant European footprint, we are licensed with banks in Germany and in France.”

“Over the next 18 months or so we are going to upgrade those facilities, we’ll be taking extra space in a number of them and be increasing our headcount and infrastructure around those facilities,” said Gnodde.

He said the numbers involved were “in the hundreds of people as opposed to anything much greater than that” and would also involve hiring people in the remaining 27 EU countries .

Gnodde added that no final decisions had yet been made about how many staff would eventually work in which locations. “This is all in the context of contingency planning,” he said. “What our eventual footprint will look like will depend on the outcome of [the Brexit] negotiations and what we are obliged to do because of them.”

In January, the bank was the subject of speculation it could shift half of its 6,000-member workforce out of London, with 1,000 of the jobs relocated to Frankfurt.

At the time Goldman said no decisions had been made. Goldman has about 200 staff in Frankfurt and 100 in Paris.

He said: “Whatever the outcome [of the Brexit talks], London will remain for us a very significant regional hub and a significant global hub. London will remain a very significant important centre.”

Other banks have also warned that roles will have to go as a result of Brexit. HSBCboss Stuart Gulliver has said 1,000 roles will move to Paris in about two years, when Brexit becomes effective. Swiss bank UBS has indicated that 1,000 of its 5,000 staff could shift, possibly to Frankfurt or Madrid. US bank JP Morgan hassaid 4,000 UK jobs are at risk.

Estimates of the impact of Brexit on the City vary widely. Xavier Rolet, chief executive of the London Stock Exchange, has warned that 230,000 finance jobs could disappear while Mark Carney, governor of the bank of England, has played down the risks. He described the City as “Europe’s investment banker” and said European economies could be damaged if their access was disrupted after Britain leaves the EU.

Goldman Sachs’ chief executive, Lloyd Blankfein, admitted in January that the bank was holding back from moving new activities into London, as had been previously planned.

However, the bank is continuing to press on with building its new nine-storey London HQ, with the aim of moving in in 2019. The bank could take all the floors or subletto tenants.