STAMFORD—The rumors UBS would be leaving Stamford started swirling shortly after Gov. Dannel P. Malloy was sworn in as governor, so he was excited to announce Tuesday that the company would maintain 2,000 jobs in Connecticut.
Currently there are about 3,500 UBS employees in the state and UBS officials were adamant about not releasing the number of employees in any specific location, including their Stamford office.
The news comes the same day the financial services company announced it was laying off 3,500 employees in its global banking operations to reduce its costs by $2 billion. Almost half of the job cuts will be in the investment banking division. The remaining cuts will come from the wealth management and asset management businesses, according to a company press release.
The company which moved to the state during Malloy’s tenure as mayor was unable to announce it was creating jobs, so it will not be considered a “First Five” company. In order to qualify for those incentives the company must promise to create 200 jobs over a specific period of time.
However, it will receive a five year no interest, or low interest loan of $20 million. Connecticut economic development officials refused to disclose how exactly the loan is structured and it was described by Malloy as a “forgivable loan.”
Phil Lofts, CEO of UBS Americas, said the $20 million will be spent on infrastructure improvements and computer upgrades. He said Malloy and the attention he paid to the company had a lot to do with the company’s decision to stay in the state.
“This recognition, as well as the benefits that accrue to that presence, were significant factors in our decision making process around our real estate holdings,” Lofts said at a press conference in the lobby of the building. “UBS will continue to maintain our flagship trading floor and substantial operations across Connecticut.”
The investment was touted by Malloy as a good investment because if UBS had packed up and left the state would lose $70 million in direct and indirect tax revenue. If the company had gone Malloy would have struggled to maintain an image as a governor able to create jobs.
UBS officials refused to disclose how many employees work at the Stamford location with the flagship trading floor that spans two football fields, but they estimated about 3,500 employees work in Connecticut and 16,000 to 17,000 in the tri-state area.
In July New Jersey gave UBS a $27 million tax break to keep about 2,000 of its employees in that state. According to news reports UBS threatened to move the jobs to Connecticut or New York. Reuters reported that disappointing profits discouraged the company from continuing discussions about moving to Tower 3 at the World Trade Center site.
Complaints about the quality of life in Connecticut for younger investment brokers and rumors UBS would move its Connecticut operations to New York continued for most of the Spring.
“We been able to retain good talent. We’ve enjoyed working here and being part of the community,” Lofts said dismissing the rumors. “Connecticut clearly provides a very educated workforce for us.”
Malloy said the Swiss banking company’s decision to maintain a significant presence in Connecticut is important and adds to the number of financial service companies that call the state home.
Malloy said one in 10 employees in the state are employed in the financial services industry.
UBS moved its Americas headquarters to Stamford from New York in 1997 when it received tax incentives from the state. That 10 year deal expired this year, but the new $20 million loan extends that deal five more years.
Catherine Smith, the state’s economic development commissioner, said the original 10 year deal required them to create 2,000 jobs in the state and they created many more than that. She said the same thing can happen this time.