“Trust but Verify”: Bialecki – State Street Edition

Imagine, if you will, a Boston-based company called Acme Financial merges with another company called XYZ Financial in the past five years.  By merging the two companies, Acme Financial increases its employment from 100 employees to 140 employees.  Now imagine that given the floundering economy Acme Financial decides to lay off 15 employees.  When the press calls Acme, it’s spokesperson assures the reporter that Acme is “committed to keeping its headquarters in Boston, and we’ve increased our Massachusetts workforce by 25% over the last 5 years.”

If you were the secretary of economic development in the Commonwealth of Massachusetts, would you take Acme’s statement at face value?  If you are Greg Bialecki, it seems you would.  That’s exactly how he responded to the news of State Street laying off 4 1/2% of its workforce in Massachusetts.

From the Boston.com story… (0.00 / 0)

“We remain committed to Massachusetts as our headquarters state,” company spokesperson Arlene Roberts said. “Over the past five years, our Massachusetts head count has grown by 24.6 percent.”  

by: Greg Bialecki @ Tue Jul 19, 2011 at 21:38:56 PM EDT

I would hope that the Secretary of Economic Development for the Commonwealth would remember that State Street and Investors Bank and Trust merged in 2007.  After that merger, the combined workforce of State Street and IBT was a little over 13,000 in Massachusetts.  According to State Street’s own numbers, they employ 12,600 in Massachusetts before this layoff.  After this current round of layoffs, they will employ roughly 12,000 in Massachusetts.  My quick math tells me that’s about a 7.7% reduction in workforce over the past five years, not the 24.6% increase that State Street is claiming.

Also, to Secretary Bialecki’s other point, doesn’t Fidelity tell us every time they lay people off but they are “committed to keeping their headquarters in Massachusetts.”

No wonder the Patrick administration thinks everything is rosy in Massachusetts when they listen to company spokespeople and regurgitate the talking points without fact checking.  It’s past time that this administration trusts but verifies their information.

About Rob "EaBo Clipper" Eno