The latest evidence comes from JPMorgan Chase. The largest US bank by assets said this week that it was eliminating voicemail for tens of thousands of employees who do not deal directly with clients and would prefer to be contacted by email or text on their smart phones. Voicemail costs the bank about $10 a month per line — the equivalent of a couple of lattes — and JPMorgan is hoping to reap annual savings of about $3.2m in its retail arm and $5m at its investment bank by cutting the service.
For those of us who have toiled in some of the less fertile of corporate fields, there is an element of man bites dog to this sort Wall Street cost-cutting. The savings expected from JPMorgan’s voicemail cull are pocket change at a bank that reported $22bn in profits last year. It is hard to believe the old House of Morgan would be withdrawing corporate perks that are still on offer to, well, the likes of me.
The explanation is that small improvements actually mean quite a lot for today’s regulated banks. Returns on equity in the sector are unlikely to reach the surreal heights of recent decades — when paper profits tended towards the illusory and capital rules were far less demanding. Efficiency is the new watchword on Wall Street, and the old masters of the universe are starting to sound like parsimonious shopkeepers.
In an interview with Barron’s this year, Jamie Dimon, JPMorgan chairman and chief executive, even called his bank “the Walmart of fixed income”, invoking the image of the bare-bones US retailer that kept such a tight lid on costs it required executives (of the same sex, mind you) to share hotel rooms while travelling on business.
Perhaps our bean counters worry that we will eat them or burn them for heat during the dead of winter
I got a taste of today’s JPMorgan when I ventured into its Park Avenue headquarters on a recent Friday to have lunch with one of its public relations executives. He took me to the upstairs dining room and there I found Mr Dimon, dressed in his shirtsleeves and holding court for several of his lieutenants at a table replete with hamburgers and French fries (or chips as they say in the UK).
It has been my experience as a reporter that Mr Dimon truly loves his burgers. Questions about his younger days in the New York City borough of Queens often lead him to reminisce about his visits to his local White Castle, a US fast-food chain that claims to have introduced a small hamburger known as the “slider” in 1921.
But I would argue that there was an undeniable element of corporate theatre on display in the JPMorgan dining room on that spring day. Mr Dimon was signalling to his troops (and to visitors such as this reporter, who dined on a fairly prosaic turkey club sandwich) that simpler pleasures are the order of the day in the one-time corporate home of such grandees as J Pierpont Morgan and David Rockefeller.
In the middle of the action was Dimon, in shirtsleeves at a table replete with burgers and fries
The reductions in voicemail service at JPMorgan are only a small part of the billions of dollars in expense cuts being promised by Mr Dimon’s bank — and it will be a tough sell for a chief executive who was awarded a $27.7m pay package by the bank last year, according to the Securities and Exchange Commission formula for calculating such things.* Indeed, as anyone who has ever been through one of these exercises themselves will tell you, digestive difficulties are almost inevitable, if only because corporate belt-tightening typically begets even sillier forms of corporate belt-tightening.
First they take away your voicemail, and then it’s your paper clips and your pens. When I started out in journalism, to give another example, it was customary to leave fresh notebooks out in the open so that reporters could grab them quickly on the way to cover stories. Now they keep them under lock and key at my shop. Perhaps our bean counters worry that we will eat them or burn them for heat during the dead of winter (I am sure our readers will be able to provide additional examples).
JPMorgan is already taking a risk with its voicemail campaign because one of its effects will be to push more of the bank’s internal discourse online — where it can be perused by regulators and prosecutors. If past performance is a guide to future returns, we could expect additional payments to the government to follow. Just about all our recent banking scandals have featured unfortunate emails or text messages.
I suspect JPMorgan’s bet is that the employees who are losing their voicemails are not the kind who will speak out of turn. From what I can tell, these are the folks who keep the bank’s branches humming and provide the computer support for its wheelers and dealers on Wall Street. They aren’t the people who manipulate foreign exchange markets or misrepresent the quality of mortgages to investors.
Then again, if they do want to talk about life at JPMorgan, they can always email me at the address below. If you write, I’ll send you my phone number and you can either call me at work or leave a message. I still check my voicemail. A reporter always should.