UST Announces First Layoffs

Source from:  The Advocate Staff 01/15/2009

UST Inc., the smokeless tobacco products maker that Altria Group Inc. bought last week, announced the first 34 layoffs stemming from the total shutdown of its Stamford headquarters by year's end. The company said Monday in a letter to the Connecticut Department of Labor that the 34 people will leave March 18. The firings range from four administrative assistants to UST's vice president, general counsel and assistant secretary and its executive vice president, chief legal officer and secretary. Altria and UST would not identify those who hold the two senior positions to be cut. "We anticipate additional separations to occur at regular intervals until the facility is closed," UST Vice President Steven Younes said in the letter. Tobacco giant Altria, the Richmond, Va.-based maker of Marlboro cigarettes, completed its $10.4 billion acquisition of UST Jan. 6. Altria said that day it would vacate the 140,000-square-foot space that UST leases at 6 High Ridge Park in Stamford and move the UST subsidiary to Richmond. Altria said it will eliminate all Stamford jobs that will not transfer to Richmond. UST, maker of Skoal and Copenhagen snuff, now employs about 350 people in Stamford. The total number of jobs headed to Richmond has not been determined yet, Altria spokesman David Sylvia said Wednesday. "There will be various waves of departures," Sylvia said. "We are looking department to department for areas of redundancy, particularly headquarters functions." Sylvia said the workers who don't move to Richmond will receive medical benefits on a temporary basis and a minimum of 24 weeks of severance pay, depending on length of service. UST is working with the Connecticut Development Authority on a plan to pay back a $500,000 state sales tax exemption that the company received for office equipment and furniture when it relocated its headquarters from Greenwich to Stamford in 2007, he said. UST had not yet received a $3 million low interest loan and $950,000 corporate income tax credit from the Connecticut Department of Economic and Community Development and a $2 million loan from the Connecticut Development Authority, Sylvia said. UST would have gotten those benefits if it stayed in Connecticut. Altria, the largest U.S. tobacco company, countered falling cigarette demand with the UST purchase. One result of the acquisition will be more people out of work. Operations Inc., a human resources consulting firm in Stamford, has had an overwhelming response to an outplacement service it started two months ago, said David Lewis, its chief executive officer. "It's tougher than it has ever been before," Lewis said. "The activity level of people in this business has doubled and quadrupled." He said more companies either are not hiring or are laying off employees, especially financial services firms. "If you are in finance or back-office finance, you might have to wait three or four years for a new job," Lewis said. Enditem