Paul Bass Photo
NewAlliance Bank threw some money at New Haven’s tennis tournament Tuesday — the same day it officially notified the state that it’s laying off 229 workers.
New Haven’s mayor saw a connection.
The New Haven-based New England bank is making the job cuts as part of a planned $1.5 billion takeover by Buffalo-based First Niagara Bank. The biggest swath of cuts will hit its New Haven workforce. The bank had previously announced the layoffs were coming; on Monday it made the decision official in a filing with the state Department of Labor.
The bank notified the state of 126 layoffs in New Haven and 93 in Manchester between April 15 of this year and January 27, 2012. Click here to read the so-called “warn notice” listing the positions being cut.
First Niagara Vice President of Public Relations & Corporate Communications Leslie Garrity downplayed the announcement.
“There’s no new news,” Garrity said. She said the bank already publicly announced the same layoffs in December. Click here for the bank’s press release outlining the cuts.
The bank plans to have a net reduction of 50 positions in 2011, or 4 percent of NewAlliance’s current 1,200-employee workforce, according to Garrity. She said NewAlliance would return to current employment levels by the end of 2012 as the bank opens more branches across NewAlliance’s footprint, creating more jobs.
Meanwhile, the bank also signed on as a “presenting sponsor” of the New Haven Open at Yale (nee Pilot Pen) tournament.
That act of public charitable service didn’t impress New Haven Mayor John DeStefano.
“Here is the interesting thing — the juxtaposition. This shows how badly organized they are. The notice arrives the same day they announce the tennis sponsorship,” DeStefano said in a conversation Tuesday afternoon.
DeStefano plans to oppose the proposed bank takeover when the banking department holds public hearings. One of those hearings takes place March 9 at New Haven’s Conte/West Hills School. The mayor and other community critics argue that based on two facts — First Niagara is based in Buffalo; and has a spotty community-lending record after it takes over local banks — New Haven can expect job cuts and less local lending and charitable support from the deal.
However, New Haven should also expect announcements like Tuesday’s tennis gift in coming weeks leading to the hearings, DeStefano predicted. In order to make the bank look like a community-minded institution.
“They will roll out a series of ‘Look at how nice we are and how we’re helping the community’ announcements,” DeStefano said. “They’re going to roll out goodies. They’re going to go to all these poor nonprofits who are going to be zeroed out in tomorrow’s [proposed state] budget, who are getting CDBG [block grant money] from me. They serve important and urgent missions. They’re going to look for a lifeline from this bank,” DeStefano said.
“Take a sum of these commitments, multiply that by 10, and they don’t approximate the [estimated $30 million] payments to the president of NewAlliance to walk away” in the current takeover deal, DeStefano said. “Here’s John’s prediction: In three years, they’ll be taken over and [CEO] Mr. [John] Koelmel will get $50 million” after another corporate takeover.
New Haven gets a subsidized tennis tournament for the entertainment of wealthy Fairfield County residents in exchange for layoffs of good paying jobs. Sounds like a good deal to me!