(Bloomberg) -- The Securities and Exchange Commission’s Los Angeles and Philadelphia regional offices could close in coming months as part of an effort by the General Services Administration to reduce federal government office space and related costs.
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The GSA plans to terminate those two leases, the SEC’s Chief Operating Officer Ken Johnson told staff in an email Monday that was reviewed by Bloomberg.
Reuters reported on the plans earlier.
The GSA is also looking to terminate the lease of the Chicago regional office, though the regulator said it had informed the GSA that terminating the lease could result in significant financial penalties, the email said.
The GSA plans to empty the Chicago and Philadelphia offices by August and the Los Angeles one by September, according to Johnson’s email. If new office space isn’t obtained by then, staff will move to full-time telework.
Agency spokespeople declined to comment.
The agency paid more than $30 million during fiscal 2024 for GSA-owned rental space, according to a report. The SEC has worked closely with the GSA to manage the cost of its facilities through “rightsizing” of office space when leases expire, the agency said in its fiscal 2025 congressional budget request. That effort has resulted in about $8.5 million in annual rent savings since 2011, according to the budget request.
Such a move would be at odds with the Trump administration’s requirement for federal workers to return to the office. SEC employees are being required to return to their offices by April 14, Bloomberg previously reported.
The lease terminations aren’t related to staff reorganization or reductions in force, Johnson said in the email. The SEC is nevertheless undertaking efforts to reduce its headcount. It recently informed the heads of each of its 10 regional offices that their positions would be eliminated, according to a person familiar with the matter.
It is also offering staff a $50,000 incentive payment if eligible employees opt to resign from their positions. The deadline to apply is March 21.
The GSA, which oversees the leasing and management of government buildings across the country, is undertaking a sweeping effort to dramatically reduce the square footage it leases for its workforce.