Economic concerns raised as two major Midstate companies move their headquarters

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CAMP HILL, Pa. (WHTM) — Rite Aid and Harsco are both moving their headquarters from Cumberland County to Philadelphia. Each company has a different plan for the transition, but both are causing some economic concerns.

Rite Aid is planning to have their Philadelphia headquarters be a space for company gatherings, while their 2,800 corporate employees work remotely from wherever they want. They say there will be no layoffs and that they’re actually hiring.

“We’re changing our business from the inside out, and our reimagined workplace is the latest exciting step toward the future of this company,” Rite Aid CEO Heyward Donigan said. “We believe in remote work, and as we lean into it for the long term, we are investing in a physical footprint that will facilitate its best version.”

Indrit Hoxha, an Associate Professor of Economics at Penn State Harrisburg says many companies are rethinking the way they operate because of the pandemic. He believes there is a possibility that corporate jobs at Rite Aid still could be affected in the future.

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“At this point, they’re just saying hey we’re not firing anyone, you can just work from home. And it’s a smooth transition,” Hoxha said. “The problem is that they’re moving the resources to a different place, which eventually could be replaced. And they could say sorry we have done a restructure where we don’t need you anymore.”

Harsco is planning to move its headquarters by January of 2023. They say they’ll keep on as many employees as possible.

“We are confident that this move to America’s sixth-largest city will provide us with more options to the future resources needed to fuel our growth including a strong infrastructure, a much larger and diverse talent pool, and closer proximity to our customers and federal government agencies.” Harsco CEO Nick Grasberger said.

The moves will have impacts beyond the companies’ employees though.

Terrill Frantz, an Associate Professor of E-business at Harrisburg University, says this is not a good thing for Cumberland County. “How much these companies pay in taxes to the local school system or what have you, it might be more than just a little hit,” Frantz said.

He believes this should encourage local leaders to explore why the companies are leaving the area.

“It’s like losing a spouse or a boyfriend or a girlfriend. It’s like is there something I’m doing wrong here?” Frantz said. “I would want to understand that and rectify that because the last thing you want is businesses and people moving from your community.”

Frantz says this could be an opportunity for the Midstate to learn from Philadelphia. “There is an attractive place out there that you should look at and say can we do that here to attract people to us, rather than have them leave us?”

Ryan Unger, CEO of Harrisburg Regional Chamber and CREDC says he’s still optimistic.

“Certainly we’d love it if Rite Aid and Harsco would stay and grow here in the greater Harrisburg region,” Unger said. “At the same time, we’re ecstatic that we continue to perform really well in this region. We’ve added over 12 thousand jobs so far this year. We’re going to focus on those jobs and those companies.”

When they do go, the loss of the multi-million dollar companies is sure to be a blow. “The effect will be tamed right now. Eventually, we’ll start feeling the pain,” Hoxha said.

Rite Aid says they’ve already found a new place in Philadelphia’s Navy Yard district.

Harsco is looking at a lease for an office in the Downtown Philadelphia area.

Neither company has made any plans for what will happen to their old buildings public.

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