WEDNESDAY, NOV. 14: Most of the 20-plus staff at reinsurance firm Flagstone are to be let go if an expected takeover by rival firm Validus goes ahead, the Bermuda Sun can reveal.
Jon Levenson, executive vice-president of Validus, confirmed that affected Flagstone staff — the vast majority of them Bermudians — had been notified yesterday that most of the jobs at the firm would go.
Majority of staff
He said: “The majority of employees in Bermuda will not have continuing employment. I am not at liberty to give out the exact numbers.”
An employee told us that it appeared most staff would go, adding: “Everyone is upset because of the way it’s been handled. They haven’t told us anything except the date we are to finish — three days after the merger. The shareholder meeting is on November 28, which is when the merger will be approved.”
The employee added: “It’s very hard for anyone to find a job in this market, but it is what it is. People are very depressed and upset — it just hasn’t been dealt with very well.”
The employee added that Flagstone had been slimming down its operation quietly over the last two years, with the current payroll less than half what is was two years ago.
Flagstone was set up in Bermuda in 2005 but in the last few weeks, staff have been concerned that their jobs might be in jeopardy if the merger goes ahead, as expected, at the end of the month.
Mr Levenson said: “We have provided notifications to Flagstone staff about their futures, or not, with the combined organization.
“The way we think about this is that it’s never a decision which Validus takes lightly to make any staff redundant.
“Any determination is taken with as much care as we can.
“What we are trying to do is have the best company we can have in Bermuda. We do really believe Bermuda is our domicile, unlike some of our peers, who have re-domiciled to Switzerland or other places.”
Mr Levenson added that Validus continued to employ 110 people on the island, through a number of operations.
He said: “We are committed to the island and Bermudian hiring and advancement.”
Mr Levenson said that the jobs would go because the two firms are in the same business — which would have meant duplication of labour if layoffs had not been decided on.
He added: “There are some functions which overlap — we are not just moving operations offshore, as has happened in some other cases.”
And Mr Levenson said: “We are providing to those employees who have to leave generous severance and outplacement services as well.”
David Brown, CEO of Hamilton-based Flagstone, said he would be retiring when the merger, which is subject to a shareholder vote and regulatory approval, went ahead.
He added: “People are being spoken to about who will be retained permanently.”