On Tuesday, UBS announced plans to cut 3,500 job worldwide, to save $2.5 billion by 2013.
Almost simultaneously, the state of Connecticut found that money talks -- if it wants to keep UBS jobs in its state.
Governor Dannel P. Malloy announced that UBS and the state "have entered into a new partnership agreement for five years, re-affirming UBS’s commitment to Stamford and to the state.'' UBS had been considering moving all the jobs in Stamford to New York City.
The "partnership"? The state of Connecticut gives UBS a $20 million "forgivable" loan. UBS agrees to keep at least 2,000 jobs in the state, for five years.
UBS may put the funds toward "infrastructure, employee training and technology." But the accounting is really pretty straightforward. That's $20 million UBS didn't have before. And doesn't necessarily have to pay back.
That keeps 2,000 jobs for five years. At a cost of $2,000 per employee per year. From state coffers.
“UBS is an important part of Connecticut’s financial services landscape — not only in terms of the number of people they employ, but in the enormous financial contributions they make to the local and state economies,” said Malloy. “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.”
For UBS's employees, $2,000 is akin to a modest annual holiday bonus. For Malloy, it can't be considered vote-buying -- because he's likely to lose more than 2,000 votes over this. The state's unionized public service employees, staring at widespread layoffs under Malloy's attempts to balance the state budget, reluctantly approved $1.6 billion in concessions over the next two years. Part of which now, indirectly, goes to UBS.
UBS operates in Stamford what is often-regarded as the world's largest trading floor. The floor (pictured) is located across I-95 from the Amtrak and Metro North train station there.
If UBS adds jobs, the company could get another $7 million in forgivable loans.