UBS Keeps 2,000 Jobs in Connecticut in Five-Year Loan Deal
UBS AG (UBS), Switzerland’s biggest lender, promised to keep at least 2,000 jobs in Connecticut under a five-year agreement with the state, in which the company will get a $20 million “forgivable” loan.
The bank, which has about 3,500 people in the state, views the pledge as a minimum level, not a target, UBS Americas Chief Executive Officer Phil Lofts said in an interview today. The deal lets the firm make “minor staff relocations” between Stamford, Connecticut, and New York, he and Connecticut Governor Dannel P. Malloy said in a statement. UBS may receive $7 million in additional loans by adding jobs.
The bank, led by Chief Executive Officer Oswald J. Gruebel, said today it would cut 3,500 jobs globally as earnings decline amid stricter capital rules and a slowdown in client trading. The Zurich-based firm has been reviewing its use of real estate in Connecticut, New York and New Jersey and earlier this year considered moving U.S. investment-bank staff from Stamford to a site at Manhattan’s World Trade Center, a person with direct knowledge of the matter said in June. By July, the company had shifted focus to locations in Midtown.
“This project will retain at least 2,000 high-quality, high-paying jobs in the state, spur capital investment and reaffirm the state’s reputation as a leader in financial services,” Malloy said in the statement.
‘Very Dark Day’
UBS completed its Stamford expansion in 2002, building a trading floor for 1,400 people. The office is about an hour by train from Manhattan’s Grand Central Terminal. The company leases more than 3 million square feet of office space for various operations in the New York, New Jersey and Connecticut region, a company spokeswoman said in June.
The bank plans to keep the Stamford trading floor, Lofts said at a press conference. He declined to comment on what impact the global job cuts may have on operations in the city. Under the deal for additional loans, the bank will get credit for every 250 jobs it adds, according to the statement.
“It would have been a very, very dark day if they had pulled up stakes and left,” said John Goodkind, managing principal in commercial property broker Newmark Knight Frank’s Fairfield County office. “It’s a good thing for Stamford, and for the whole area,” said Goodkind, who helped negotiate the relocation of Starwood Hotels & Resorts to Stamford from White Plains, New York.
The loans will help offset UBS’s investment in infrastructure, technology and training, according to the statement. The firm has more than 17,000 employees across the three states, said Christiaan Brakman, a company spokesman.
“This decision enables our employees to continue to support the local communities where they live and work, which is especially important in light of the challenging economic climate,” Lofts said in the statement.
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