The entire premise of this is cost savings - and because the economy is flat, deposits are down, the branch networking footprint is tailored to a few distinct markets, and the executive bonus structure is unsustainable. The organization has also become more top heavy, though under Pandit that was slowly being eliminated.
Discontinuiation of distributed teams can only serve to harm the organization, as there is no scientific evidence to demonstrate that co-location has a demonstrable positive impact on productivity.
This is a chickenshit organization - most development jobs are being outsourced to India under Accenture (from Tata) and a thin band of North American SME's and newbies are expected to lead from the ground up.