Job cuts loom in merger of banks
People’s United faces hundreds of layoffs, dozens in Hartford
Hundreds of employees at Bridgeport-based People’s United Bank — including 43 in downtown Hartford — will lose their jobs when one of Connecticut’s largest and oldest lenders is acquired by M&T Bank of Buffalo, N.Y., according to a filing with the state.
M&T Bank told state labor officials that a total of 747 employees in Connecticut will be cut with the majority, 661, at People’s United’s Bridgeport headquarters. The job cuts represent about 13% of People’s United’s workforce of about 5,600.
The layoffs could get underway as early as Oct. 1, according to the filing received by the state Department of Labor on Thursday, about the time M&T’s $7.6 billion acquisition of People’s United is expected to secure all necessary merger approvals. The layoffs are expected to wrap up by May of next year.
Elected officials swiftly decried the job cuts Saturday.
U.S. Sen. Richard Blumenthal, D-Conn., said the depth of the job loss contradicted assurances he had received from top executives at People’s United at the time of the merger announcement in February. In those conversations, Blumenthal said he was told there would be no significant impact on employment.
“I am deeply alarmed,” Blumenthal said. “I am demanding additional information from the banks and considering seeking federal and state regulatory action. Bank mergers already have taken a toll on jobs and competition in Connecticut and nationwide.”
Blumenthal said the cuts threaten to make the part of downtown Bridgeport near People’s United headquarters a “ghost town.”
Gov. Ned Lamont, who has been working to foster employment growth in the state’s financial service sector, said Saturday the word of the job cuts was disappointing for both Bridgeport and the state.
“The governor and his administration will remain in contact with all parties to further minimize job loss and ensure the bank fosters a true partnership with the city of Bridgeport and has a presence in Bridgeport’s communities,” a Lamont spokesperson said in a statement.
In bank mergers, it is typical that overlapping corporate, administrative and back office jobs — many of them concentrated in headquarters of the acquired bank — are on the chopping block. The banks’ announcement in February said job cuts would be augmented by positions that would be eliminated once they became vacant.
In a statement Saturday, an M&T spokesman said 79% of People’s United employees would keep their jobs after the acquisition is completed, including branch and customer service employees. The reductions would be to “ensure our new organization is structured in a way that provides the best quality service for our customers and communities,” the statement said.
“We believe this is necessary to remain competitive within the broader marketplace, reduce costs over the long term and avoid overlap following transaction close,” the statement said. “While these are difficult steps to take, we are confident that the streamlining will help ensure we are delivering the services our customers need, where they need it, while retaining jobs for our dedicated employees.”
M&T said employees losing their jobs could apply for 1,500 open positions in the M&T footprint, which stretches from Washington, D.C., north to upstate New York. M&T said Bridgeport will remain a hub for the merged bank as the Northeast regional headquarters.
“People’s United employees who were impacted in the merger will be given first priority for applications for these open positions that meet their experience and qualifications, and we will work to maximize the ability to obtain M&T employment from their existing work location,” M&T said.
According to a filing received Thursday with the state Department of Labor, M&T disclosed job cuts at 16 locations around the state, including 42 at People’s United’s regional office in downtown Hartford at Goodwin Square and one at One Financial Plaza, the “Gold Building,” where People’s United has a branch.
In addition to the Gold Building, the filing also shows job cuts at 12 branch locations, including East Windsor, Enfield, Farmington, South Windsor, Southington and Wethersfield in the Hartford area. Two locations are listed in Farmington.
When the People’s United acquisition was announced earlier this year, it was clear that job cuts loomed. The merger partners said they expected to save $330 million a year in costs, about 30% of operating expenses at People’s United Bank’s parent company, People’s United Financial Inc.
While the two banks have branch overlap in Fairfield Country and Long Island, M&T said People’s United’s recent decision to close its 140 Stop & Shop branches, including 56 in New York, would ease some of the need to close branches, the banks said in February.
M&T Bank, which has a toehold in Fairfield County with 11 branches, is poised to scoop up 419 People’s United branches in five New England states, including 170 in Connecticut and New York. The acquisition would allow M&T to extend its reach deep into New England and quickly bulk up on $60 billion in People’s United assets, $52 billion in deposits and $44 billion in loans.
Together, the combined banks would create a banking giant in the Northeast and Mid-Atlantic regions, stretching from Washington, D.C., to Maine. They would have $200 billion in assets and a network of 1,100 branches and more than 2,000 ATMs in 12 states.
M&T executives have said that People’s United employees who work directly with customers are not likely to be significantly affected by any job cuts.