MetLife Inc. is facing pressure both to cut fewer jobs and to cut more jobs at Travelers Life & Annuity.[@@]
MetLife, New York, agreed in January to acquire Travelers Life from Citigroup Inc., New York, for $11.5 billion in cash and stock. MetLife announced Monday that it plans to offer 1,400 “ongoing positions,” including 1,100 jobs in Hartford, to Travelers Life’s 2,000 employees.
MetLife, which is still seeking permission from Connecticut regulators to complete the Travelers Life deal, already has about 1,200 employees of its own in Connecticut.
In March, the Hartford Courant was reporting that MetLife might cut as many as 1,200 jobs, and Travelers Life employees have speculated that attrition and other factors might cut the number of layoffs to considerably less than 600.
Connecticut Gov. M. Jodi Rell has reacted to the announcement of the job cuts by emphasizing her disappointment.
“For MetLife, this is a business deal,” Rell says in a statement about the announcement. “For me, this is about the lives and livelihoods of hundreds of dedicated employers ? and their families.”
Because MetLife says it has negotiated as much as it can about savings jobs, “I have spoken with the attorney general to discuss what role we can play in the regulatory approval process of the insurance department,” Rell says. “I know government’s role in business acquisitions is limited. But MetLife needs to know that I will fight for these jobs in every way possible.”
Andrew Kligerman, an insurance industry analyst with UBS Investment Research, New York, writes in a comment on the MetLife-Travelers deal that he fears that MetLife may eliminate too few jobs.
If Rell succeeds at keeping MetLife from streamlining Travelers Life, that could mean that MetLife will fail to meet its Travelers Life expense-reduction goal, Kligerman writes.
The job controversy is just one of several Travelers Life risk factors that could hurt MetLife’s return on equity, and “the deal appears to offer limited strategic benefit other than scale,” Kligerman writes.
MetLife put out a statement of its own trying to find a middle ground between the advocates and opponents of Travelers Life job cuts.
“Our decision on jobs is based on MetLife making a business decision on how best to merge 2 businesses while at the same time being sensitive to the jobs situation in Hartford,” the company says.