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    Friday, April 26, 2024

    Layoffs expected to trigger additional job losses in region

    Pfizer Inc.'s local layoffs of 1,100 over the next 18 months could trigger up to triple that number of lost jobs in other industries throughout the region.

    Economic experts said Tuesday they will seek funding from the U.S. Department of Labor to help offset the expected retraining and unemployment-benefits costs related to the loss of the Pfizer jobs. The experts also warned that there is a potential for nearly three indirect layoffs from each lost Pfizer job.

    "The sheer number that is being reduced here is rather shocking," said John Markowicz, executive director of the Southeastern Connecticut Enterprise Region in New London.

    "This is a big deal," Markowicz said. "There are 1,100 highly skilled, well-paying jobs that are leaving the area or being eliminated. It's not only the direct effect but the multiplier effect that will ripple through the community."

    Experts said the average annual salary for pharmaceutical industry employees is $117,000.

    The worst impact is likely to be on towns such as East Lyme and Salem, where many Pfizer employees have made their homes, Markowicz said.

    According to the U.S. Department of Commerce, each job in Connecticut's drug and pharmaceutical industry creates an additional 2.9 jobs in supporting industries elsewhere in the local economy - everything from restaurants to the housing industry and automotive dealers.

    Don Klepper-Smith, chief economist and director of research for the New Haven-based DataCore Partners, and John Beauregard, executive director of the Eastern Connecticut Workforce Investment Board in Franklin, have already started compiling information that could help this region apply for a federal grant to soften the blow.

    The Workforce Investment Board plans to seek funding from the National Emergency Grant Pool, a competitive funding source from the U.S. Department of Labor, Beauregard said. But the region has to make a case that such layoffs will "create a demand for services that goes beyond the capacity of what we have to handle it right now," he said.

    "Because of this multiplier effect," said Beauregard, "we know we're dealing with job losses elsewhere in the community."

    The federal grant application requires detailed information that only Pfizer can provide, such as what severance packages will include, so the first thing Beauregard is doing is trying to get official data from the company through the state Labor Department.

    The region has to be sure that there is no duplication of assistance from the company, he said.

    U.S. Rep. Joe Courtney, D-2nd District, said the emergency grant triggers more comprehensive forms of assistance in areas such as retraining and extension of job-loss benefits. Because of the size of the layoffs, the region should easily qualify for assistance, he said, adding that he's already spoken with Gov. Dannel P. Malloy and federal officials about possible federal funding.

    "I did talk to Pfizer today and said, 'We want to make sure you connect with Beauregard because we went through this with Mohegan Sun' (during casino layoffs)," he said. "The employer is integral to the application process. The (Pfizer) folks I was talking to today said they would totally cooperate with the Workforce Investment Board as this starts to gel."

    Courtney cited his disappointment with the company's layoffs but affirmed it was "not an indictment" of the region or its workers, but rather a global business decision the company could not avoid.

    Pete Gioia, vice president and economist for the Hartford-based Connecticut Business & Industry Association, and Tony Sheridan, president and chief executive officer of the Chamber of Commerce of Eastern Connecticut, said keeping Pfizer here represents a bit of good news in an otherwise troubling scenario.

    "We have a huge amount at stake here," Sheridan said. "The company has some of the top scientists in the world living here, very highly committed people. We want that preserved. So what do we need to do to make sure that Pfizer remains in Eastern Connecticut and remains at the level it's at?"

    Enhancing public education is one step the region can take, as well as passing legislation that would enable startups spinning off from Pfizer, such as New London-based Myometrics, to receive help in developing new business, Sheridan and Markowicz said. Such longer-term strategies, they added, could pay off over time for the region's overall economy.

    p.daddona@theday.com

    Day staff writer Matt Collette contributed to this report.

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