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MetLife Cuts: Nearly 800

State Vows To Keep Fighting Losses From Acquisition Of Travelers Life

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 said.

And since the $11.5 billion deal was announced Jan. 31, 59 jobs have been eliminated, as employees have left the company, Calagna said.

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 a year.

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 company.

Some Travelers employees who got job offers from MetLife say they are disappointing because of pay, demotions in rank, or both.

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 said.

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 that process.

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 acquisition.

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. To view other stories on this topic, search the Hartford Courant Archives at http://www.courant.com/archives.
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