Morgan Stanley CEO James Gorman on Monday admitted he “was wrong” about previously pushing staffers to return to the office while threatening to cut their pay if they didn’t.
“I thought we would have been out of it past Labor Day and we’re not,” Gorman told CNBC, referring to the COVID-19 pandemic.
“I think we’ll still be in it through most of next year,” Gorman added.
“Everybody’s still finding their way and then you get the Omicron variant. Who knows, we’ll have pi, we’ll have theta and epsilon, and we’ll eventually run out letters of the alphabet. It’s continuing to be an issue.”
Despite his softer tone, Gorman said that most Morgan Stanley employees have been back at the firm’s New York headquarters. Some 65 percent of vaccinated employees have returned to the building, and 95 percent of employees have gotten the jab, he added.
But his latest remarks are a major shift from June, when Gorman told Morgan Stanley employees that they had better be back in the office by Labor Day or else they’d face a pay cut.
“Make no mistake about it. We do our work inside Morgan Stanley offices, and that’s where we teach, that’s where our interns learn, that’s how we develop people,” Gorman said during the firm’s annual US Financials, Payments & CRE conference.
“If you can go into a restaurant in New York City, you can come into the office,” he said at the time.
Gorman also sent a sobering message to workers who fled New York to ride out the pandemic elsewhere — if you want a New York City salary, you’ll have to be in the five boroughs to earn it.
“If you want to get paid New York rates, you work in New York. None of this, ‘I’m in Colorado and work in New York and am getting paid like I’m sitting in New York City,’” Gorman barked in June.
“Sorry, that doesn’t work.”
As recently as last month, other Morgan Stanley executives have urged staffers to get back to the office.
“If you’re 21 to 35, you are nuts not to be in the office all the time,” Chris O’Dea, a Morgan Stanley managing director, said on a November conference call.
The emergence of the Omicron variant of the coronavirus as well as flaring COVID-19 cases have spurred Gorman and other executives to reconsider their return-to-office plans.
Companies from Ford to Lyft and Facebook have announced plans to push back their return to the office in light of the new variant.
Adding to the headache of ushering workers back to a New York office is Gov. Kathy Hochul’s latest mask mandate for any indoor venue that doesn’t require vaccinations. That means that office workers need to mask up even while sitting at their desks.
The order sparked outrage as it went into effect Monday despite the Big Apple having some of the lowest rates of COVID-19 and highest rates of vaccination in the nation.
Additional reporting by Lydia Moynihan