NewAlliance Merger To Result in the Elimination of 95 Manchester Positions

It might not have been a Merry Christmas for some employees at NewAlliance Bank, as it recently announced that a pending merger with First Niagara Financial Group would result in the elimination of 230 positions in Connecticut, including 95 in Manchester.

But the news might not be as dire as it initially seems. Of those 230 eliminated positions, which the banks said would come from "back-office" and support personnel, 60 employees have already opted for severance packages or early retirement plans, reducing the total number to 170 employees. The bulk of those reductions will come in Manchester, where 95 back-office and support positions are slated for elimination, 65 in New Haven, with the remaining 10 positions scattered throughout the state.

The banks said they are still working to explore "alternatives" for these 170 employees, which could result in many of these same employees being hired back as "front-office" employees to work the service counter or in sales. The banks estimate that after an initial consolidation because of the merger, First Niagara's New England workforce should expand by about 180 "customer-facing" positions by the end of 2012, brining employment levels back to pre-merger conditions.

"The decision to eliminate even one job is a difficult one, and we've used the last four months to work closely with our colleagues at NewAlliance to develop a workforce plan that minimizes the impact on employees," John R. Koelmel, First Niagara's president and chief executive officer, said in a statement. "The creation of many new customer-facing positions in NewAlliance's legacy market, combined with normal attrition and retirements, will further minimize the number of positions impacted by the merger."

As part of the merger, under an initiative titled Community Reinvestment Act, First Niagara plans to invest more than $1 billion in NewAlliance's market under a five-year plan that focuses heavily on small business lending, community development lending and lending to low-to moderate income levels for residential loans.

NewAlliance is the second largest Connecticut-based savings bank and was formed in 2004 through the merger of the Savings Bank of Manchester, New Haven Savings Bank and Tolland Bank.

Although the banks stressed they are doing all they can to mitigate workforce reduction as a result of the merger, those in the Manchester area were far from pleased with the news.

"I am very concerned and disappointed by this announcement," Mayor Louis Spadaccini said Wednesday. "This represents a large portion of the NewAlliance workforce in downtown Manchester and could negatively affect other businesses in the area. The town has reached out to learn more about First Niagara's plans so that we can assist the Downtown District in any way we can."

Tana Parseliti, manager of the Downtown Manchester Special Services District, said the loss of so many employees from the downtown area could be a difficult blow to other businesses in the district.

"NewAlliance Bank and its predecessor, Savings Bank of Manchester, have been good downtown neighbors, providing important services to the business community and participating in the charitable and civic life of the broader community," Parseliti said. "While we are heartened that the downtown Manchester bank branch will remain after the acquisition, we are concerned with the loss of an estimated 95 employees from various departments that make-up the downtown Manchester campus. These employees represent an important part of the Downtown customer base that will not quickly be replaced."

Paul McCaven, a senior vice-president at NewAlliance, said the workforce reductions would not begin until after the merger is finalized, which is expected to be in April of 2011.

"What they are planning to do is to hire back a bunch of those people," McCaven said. "But those jobs are going to be more sales, more front office people, as opposed to back-office and support positions."

There is a NewAlliance branch located at 175 West Road in Ellington.