BY ALEXANDER SOULE
Hearst Connecticut Media
After years of maintaining a Stamford workforce of 2,400 people, Royal Bank of Scotland has informed city officials it has cut its employment base in Stamford by a third, with the company doubling the pace at which it has collected tax incentives from the state of Connecticut since 2011.
Contacted Wednesday, an external spokesman for RBS did not dispute the city’s revised figures for the bank’s Stamford workforce and otherwise declined comment on behalf of the company.
- The city of Stamford reported a one-third reduction in the local workforce of Royal Bank of Scotland, the first drop since RBS took incentives in 2006 to occupy a new office and trading floor. Photo by Alexander Soule
In 2006, RBS took a state offer to relocate its former RBS Greenwich Capital operations to Stamford, consolidating 700 employees from Greenwich with 550 workers from New York City and agreeing to hire 600 more people over the life of the deal.
With RBS constructing a massive new trading floor and offices across Washington Boulevard from UBS, which at the time employed more than 4,000 people in Stamford, the two European banks formed a major anchor for the financial services industry in lower Fairfield County, which otherwise was growing rapidly as hedge funds proliferated under the financial services boom then underway.
UBS has since drawn down its workforce to the bare 2,000 jobs it needs to qualify for state tax incentives, which under a deal extension reached last year will total $20 million over five years.
Through 2013, RBS had reported official Stamford employment figures well above the 1,850-job baseline needed to qualify for its own package. Incentives under its deal totaled $9 million in exemptions from paying sales tax on construction materials, and another $100 million in tax credits over 10 years, with the implication that the company would be required to maintain its job commitments for that window.
Buried in a Connecticut Department of Economic and Community Development report last September, however, was a reported acceleration of RBS’ tax credits to $20 million in both 2011 and 2012. If the company had followed suit in 2013, it would have been able to claim its full tax credit allotment in that year, three years in advance of the original employment commitment specified by the state.
A DECD spokesman said the agency was unable to immediately address the acceleration of the company’s tax credits in 2011 and 2012.
RBS is not the only company to have doubled its annual tax credit claims of late. Norwalk-based FactSet Research did so as well in 2011 and 2012, which would have put it on pace to claim most of its credits due by 2013 under a $7 million incentive deal it reached with the DECD.
In the past year, RBS has reported laying off 50 people in Stamford in compliance with the requirements of the federal Workforce Adjustment and Retraining Act, which requires companies to report mass layoffs to give state agencies the opportunity to help workers find new jobs. The WARN filings amount to just 6 percent of the jobs reduction RBS reported to the city of Stamford; RBS currently lists just more than 25 open jobs in Stamford.
As at the end of 2013, RBS employed 118,600 people globally, a 14 percent decrease from the year before.
Joe McGee, vice president of public policy and programs for The Business Council of Fairfield County, brokered the UBS deal for the state of Connecticut while DECD commissioner under former Gov. Lowell Weicker. Whatever UBS’ decision about Stamford, McGee said that deal has proven a boon for the city and by extension Connecticut, given the structure of the deal and the bank’s extended tenure here.
McGee said RBS showed every sign of being in Stamford for the long haul when it first arrived, having multiple executives involved in varying initiatives of The Business Council of Fairfield County in Stamford. In the wake of the United Kingdom’s bailout of RBS in the 2008 financial panic, however, McGee said there was a noticeable change.
“We were very involved with them,” McGee said. “There was a tremendous amount of activity with them early on, but in the financial crisis the United Kingdom bought RBS, and then all contact pretty much ceased.”
Hearst Connecticut Media includes four daily newspapers: Connecticut Post, Greenwich Time, The Advocate (Stamford) and The News Times (Danbury). See stamfordadvocate.com for more from this reporter.
