Tong asks M&T, People’s United for details on plans

HBJ Photo | Joe Cooper People's United Bank at 1 Financial Plaza in downtown Hartford.

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By Nancy Thompson, Journal Inquirer

Attorney General William Tong has written to leaders of M&T Bank and People’s United Bank asking how they plan to mitigate the impact of layoffs announced as part of their merger.

He’s also seeking detailed information on M&T’s plans for its New England regional headquarters in Bridgeport, now the headquarters of People’s United.

M&T notified the Connecticut Department of Labor last month that it expects to eliminate 747 jobs in Connecticut as the banks combine.

In his letter to M&T’s CEO Rene Jones and People’s United CEO John Barnes, Tong said the layoff announcement came as a “shock to many” as it was at odds with assurances and commitments made to him, bank employees, and impacted communities.

“The impression you created was that job losses would be minimal and that the merged bank would continue to partner with local communities, the City of Bridgeport, and the State of Connecticut and would otherwise fulfill its obligation to be a responsible corporate citizen,” Tong wrote to them.

He asked them to explain their prior assurances and put in writing commitments to retain a large majority of People’s Bank employees, as well as to describe their plans for the Bridgeport operation and investment in the community.

Bridgeport Mayor Joseph P. Ganim had written to Tong, saying the announcement took the city by surprise.

Buffalo, New York-based M&T still needs regulators’ approval for the $7.6 billion, all-stock deal, which it hopes to complete late this year.

Shareholders of both banks have approved the acquisition, which was announced in February.

Job cuts are common after bank mergers as a way to reduce costs and eliminate employee overlap. M&T has said it will retain 80% of People’s United employees, including branch and customer service employees.

In addition to Connecticut, M&T plans to cut 254 jobs at People’s United in Vermont — 176 at People’s United Williston operations center, and 51 in Brattleboro, according to the Vermont Department of Labor.

MassLive reported that M&T plans to cut 44 jobs in Massachusetts as a result of the People’s United deal.

M&T has said the laid-off People’s employees can apply for the 1,500 open positions across M&T’s service area.

Tong asked the bank executives to explain how many People’s United employees in Connecticut the banks expect to retain, whether employees will have to apply for positions at M&T or receive automatic job offers, and whether the positions will have similar pay rates.

As part of the merger agreement, Barnes, the chairman of People’s board of directors and CEO, is slated to receive more than $34 million in cash, equity, and benefits.

Three other executives — Lee Powlus, R. David Rosato, and Jeffrey Tengel — would each receive between $4.9 million and $6.2 million in cash, equity, and benefits.

Tengel, president of People’s United, will serve as an executive vice president of M&T and the most senior executive based in Bridgeport.

In a statement issued after the layoff announcement, Tengel, said, “In any merger, there are always difficult steps to take as you finalize workforce needs for the combined organization. M&T has taken a thoughtful and empathetic view on every one of these decisions, assessing talent at the individual level to lessen impact. We are confident we will be able to position the combined company so that we can deliver the services our customers need, where they need it, while retaining a significant number of jobs and opportunities for growth.”