Connecticut businesses putting banking days behind them
Once deemed Royal Bank of Scotland’s 'Shining Star', the firm’s U.S. headquarters in Stamford, Connecticut, home to one of the world’s largest trading floors, will soon look more like a black hole. RBS is following in the footsteps of its next-door neighbor, UBS, in cutting hundreds of trading jobs from its Stamford hub. The cuts are likely to have an equal effect on local businesses in the area that rely on the town’s wealthiest workers.
“Business will slow down, especially around lunchtime,” said the manager of local restaurant Kona Grille, who asked we don’t use his name. “We get most of [RBS’s] daytime crowd.” The manager said he wasn’t worried about the long-term health of the business, however.
An anonymous worker at Morton’s Steakhouse, located just a few hundred yards from RBS, said that business was affected from the “get-go” of the initial UBS layoffs in late 2012, though they said the restaurant doesn’t serve that many bank employees anymore, so the RBS cuts won’t have much of an effect.
Indeed, some of the damage has already been inflicted in Stamford, a city that houses high-earning workers by day, though some of the money leaves at night to other pricier Connecticut towns like Greenwich and Darien that bankers call home.
“Usually they just want to get the hell out of Stanford” at the end of the day, the manager of Kona Grille said of bank employees.
Mitchell’s Fish Market, once called the “anchor” of Stamford’s Town Center, closed unexpectedly in March. The manager at neighboring restaurant P.F. Chang’s told us Mitchell’s was a local hangout for bankers in the area. The restaurant closed its door during the same month as Saks Fifth Avenue, one of Stamford’s higher end retail outlets. At the time, neither gave much of a public reason for closing.
Other high-end businesses like car dealerships and antique stores told us they haven’t experienced any dip in business, but some of the customers are changing. “There are familiar faces that you don’t see anymore,” said Mike, the manager at Autotech Foreign Car Service in Stamford. “I think a lot of bankers are back working in New York City.”
“This is the dynamic world we live in. Corporations just aren’t going to stay forever,” said Michael Pollard, the chief of staff of Stamford Mayor David Martin. “Stamford is still a very attractive city for businesses. Not one or two companies will dictate growth.”
Pollard said that, as hundreds are likely to leave RBS, Starwood Resorts is looking to bring in another 300 workers. Of course they likely won’t make up for the drop in expendable income in the area.
The financial services industry makes up less than 15% of the city’s economy, Pollard said. Stamford still plays host to General Re -- Berkshire Hathaway's asset management unit -- MC Asset Management and several other investment and financial services firms. But none have the size and gravitas of RBS’s trading unit. Pollard said Mayor Martin will be meet with executives from RBS next week.
Connecticut a happy home
Traders too are lamenting the loss of jobs in Connecticut, even if they find work back in Manhattan. “You’d be crazy not to want to work out of the city near where you can own a home,” said one 35-year-old trader who commutes in to New York at 6 a.m. every morning.
And job losses in Connecticut aren’t just coming on the sell-side. SAC Capital, Steven A. Cohen’s iconic hedge fund, turned in to a family office following the company’s guilty plea over insider trading charges. The Greenwich firm has also said goodbye to many traders in recent months.