(I didn’t see much discussion of State Street’s most recent round of layoffs earlier this month, so here are some thoughts. Thanks to Adam Reilly for a helpful tweet.)
State Street Corporation, a large financial services company with headquarters in Boston, has been in the news a fair amount over the last few years. You might remember State Street from the Congressional debate on the Dodd-Frank financial services reform bill in 2010. State Street and other banks persuaded Senator Scott Brown, whose vote was critical to the bill’s passage, to champion a successful effort to loosen the so-called Volcker Rule, which prohibited banks from gambling in the market for their own profit (where the winnings might come, say, from the pockets of their own clients).
Senator Brown said that his advocacy on the reform bill on behalf of the banks was “designed to protect Mass. jobs.” So maybe he was a bit surprised that the next time State Street made the news, in December of 2010, it was for eliminating Massachusetts jobs, not protecting them: 400 workers were laid off that month, even though the company had recently reported increased revenues and profits. Soon afterward, in July, 2011 (on the same day it announced a “strong” earnings report), State Street eliminated or outsourced 558 more jobs in Massachusetts.
Last summer, the Globe asked State Street Chairman, President and CEO Joseph Hooley about the security of jobs in the state. State Street had just won a tax break of $11.5 million from the city of Boston for its planned construction of a new waterfront office building — brazen is the new normal in the corporate world — which invited the subject of quids pro quo:
As part of the agreement with the city, are you promising to create any jobs?
No. I mean we’re going to create jobs given the construction; we estimate some 800 jobs that will be enabled as a result. But it’s really a commitment to be in the city. And it’s open-ended.
Is there any commitment to retain all the jobs you have in Massachusetts?
You know, we plan to retain the jobs. But the tax benefit was not tied to job activity.
You know from the title of this post where we’re going. Just two weeks ago, State Street announced the layoffs of 260 more Massachusetts employees, which, CEO Hooley assured shareholders, would make the company a “leaner, more efficient, and more profitable enterprise.” This round of layoffs pushed the total number of Massachusetts jobs shed by State Street — just since Dodd-Frank — above 1,200. Along with the layoffs, CEO Hooley announced a 26 percent gain in State Street’s quarterly net income.
Kind of scary to think where we’d be without Senator Brown.