State Vows To Keep Fighting Losses From Acquisition Of Travelers
April 12, 2005
By KENNETH R. GOSSELIN, Courant Staff Writer
MetLife Inc.'s planned
acquisition of Travelers Life & Annuity will take a heavy
toll on employment in downtown Hartford, with nearly 800 jobs
lost or transferred out of the city as a result of the merger.
State officials who had been expecting major job reductions
vowed Monday to continue fighting the cuts. They are upset about
the impact on the economy in the city and the surrounding suburbs.
"The numbers that we are getting from MetLife on job losses
have decreased but are still too high," said Gov. M. Jodi
Rell, whose staff met with MetLife last week to try to minimize
job losses. "I am disappointed we were not able to reach
agreement to save even more jobs."
Initially, job cuts could have run as high as 1,200, a Rell
spokesman said Monday.
Rell and Attorney General Richard Blumenthal said they would
join forces to battle the cuts as MetLife seeks regulatory approval
from the state for the Travelers acquisition.
"The loss of so many high-paying, high-skilled jobs at
Travelers would be a devastating blow to Hartford and the surrounding
area," Blumenthal said. "I call on MetLife to reconsider
these drastic and Draconian job reductions."
MetLife officials said Monday
the New York-based insurer will maintain a "significant number" of
jobs in the city and is committed to the state. But in a densely
worded statement released Monday, MetLife failed to specifically
address key issues that have troubled government officials
and Travelers employees the most.
Those issues include the number of jobs being eliminated, how
many people would be laid off and how many new jobs might be
transferred into the city.
Pressed for numbers, however, John Calagna, a MetLife spokesman,
confirmed that 150 jobs will be eliminated when MetLife completes
its acquisition and another 450 will be phased out over the first
year. In addition, 100 jobs will be transferred elsewhere, Calagna
And since the $11.5 billion deal was announced Jan. 31, 59 jobs
have been eliminated, as employees have left the company, Calagna
MetLife reportedly plans to bring 300 to 400 jobs to Hartford,
but the insurer wouldn't discuss those intentions Monday.
Travelers had 1,859 employees in downtown Hartford before the
acquisition announcement. Under the plans announced Monday, it
would have 1,100 in the city after the companies had been merged
Monday's announcement followed the conclusion last week of meetings
between MetLife and Travelers employees. Those meetings let Travelers
employees know if they would be offered jobs with the merged
Some Travelers employees who got job offers from MetLife say
they are disappointing because of pay, demotions in rank, or
One information technology employee who asked not to be named
said some people were offered the same salary as they have now
but a lower-ranking position and lower range of potential bonuses.
That translates to a pay cut because bonuses can represent a
significant chunk of compensation, the employee said.
Some employees, for instance, were offered a bonus range of
11 percent to 18 percent of salary compared with a current range
of 25 percent to roughly 70 percent.
The job offers, according to the employee, are not negotiable.
"I feel like they put you between a rock and a hard place
and [are] pretty much forcing you to take it," the employee
MetLife hopes to close the acquisition of Travelers from parent
Citigroup by July 1. The deal is subject to regulatory approvals,
including a ruling by the Connecticut Department of Insurance
after a public hearing. The hearing hasn't been scheduled yet.
Both Rell and Blumenthal pledged that they would be active during
The prospect of large-scale job losses in downtown Hartford
comes at a time when the city is hoping for a revival, tied to
tens of millions of dollars in construction projects, some of
them publicly subsidized. Those projects range from the centerpiece
convention center at Adriaen's Landing to apartments and condominiums
in the central business district.
Part of the recipe for success depends on some of those working
downtown to also live there, boosting foot traffic and after
hours vitality that has long eluded the city's center.
Beyond the loss of money spent by workers in the city, economists
said Monday the slicing of such a huge block of jobs was troubling
for an industry that was once the bedrock of the area's employment.
"It is another sign that the insurance industry is shrinking
and continues to unravel," said Edward J. Deak, a professor
of economics at Fairfield University. "Eight hundred is
not a small number."
Local economic development officials are working to build up
insurance industry employment in the area, and the governor is
planning to hold a job summit to explore specifically what is
needed to do that. A date for the summit hasn't been set, a Rell
spokesman said Monday.
There is also concern for downtown workers that live in the
suburbs. The loss of their jobs would ripple out, affecting spending
in towns where they live, economists say.
MetLife, like most acquirers,
will be required to submit a "commitment
letter" to Connecticut insurance regulators that typically
states a minimum level of jobs to be kept in the state, and what
corporate philanthropy is expected.
Calagna said MetLife is still working on that letter. He said
he didn't know what employment levels would ultimately be outlined.
MetLife officials have told Travelers employees that a training
program will be established in Hartford. The program is intended
to give employees who are losing their present jobs the skills
to fill some of the jobs MetLife is bringing to Hartford.
Previously, MetLife said the new jobs will be in such areas
as life insurance underwriting, administrative functions, information
technology and call center operations.
"The next step is to see if we can maximize the new jobs
that MetLife brings here," said Senate President Pro Tem
Donald Williams, D-Brooklyn. "We also have to make sure
we stop the bleeding with this number."
But Williams, Rell and others expressed concern Monday that
the pay and skill levels of the jobs being lost may not match
those being brought to Hartford.
Calagna did stress that workers losing their jobs also would
have access to a MetLife website with job postings elsewhere
in the company, though not necessarily in Connecticut. And, he
noted, MetLife is committed to the state, already having 1,200
employees in Connecticut even before announcing the Travelers
Meanwhile, Hartford Mayor
Eddie A. Perez called on MetLife and Rell to continue working
together to prevent the elimination of the 800 jobs, which
he acknowledged was a "big hit" for
Hartford's central business district.
If there is still an opportunity
to reach an agreement, Perez said, "MetLife should clearly
articulate what it needs to grow in Hartford."
Courant Staff Writer Diane Levick contributed to this story.
A discussion of this story with Courant Business Writer Kenneth
R. Gosselin is scheduled to be shown on New England Cable News
each hour today between 9 a.m. and noon.
Reprinted with permission of the Hartford Courant.
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