Cities adapt as employers relocate

Boston - With the purchase of Gillette Co. by Cincinnati-based Procter & Gamble, Boston is losing its third signature company in less than two years.

Still, many residents barely flinched last week at the departure of one more headquarters in an era of consolidation and globalization.

The corporate flight means lost jobs and prestige, to be sure. As with the departure of financial giants FleetBoston and John Hancock, this latest buyout comes as an economic and civic blow. Corporate headquarters, after all, provide cities with high-paying jobs - both directly and by demanding a range of professional services - and their CEOs tend to be closely intertwined with the cultural fabric of a place.

But there are signs that cities from here to Seattle and San Francisco are learning to adapt more easily to such losses. As homegrown icons are swallowed up or move away, cities are relying increasingly on smaller employers and entrepreneurs to sustain the local economy and civic engagement.

"The reality of the situation is there are fewer and fewer of these large corporations," says Thomas Lyons, a professor of urban and public affairs at the University of Louisville in Kentucky. "It doesn't make sense to continue to squeeze blood out of those turnips. [Cities] need to focus on more and smaller firms in order to cobble together what they got before."

No one would call a company's departure good news. The "Places Rated Almanac," a guide to metro areas in America, includes a measure of headquarters in given cities.

It goes beyond jobs. "You can still be Los Angeles, or Boston, or San Francisco and ... not all the jobs are going to leave," says Joel Kurtzman, founder of the Kurtzman Group, a consulting firm that measures the competitiveness of cities. But the power base shifts, he says. "All the decisions that are really important are made somewhere else."

Mergers, driven in part by globalization, have spurred the loss of headquarters in cities across the nation. Although companies still identify closely with the cities where they are based, they tend to disperse jobs and charitable activities widely. "There is a trend among corporations to be more international in their giving, and to better align their giving with the sort of geographic weighting of their business," says Mark Kramer, managing director of Foundation Strategy Group, a consulting firm on corporate social investment, in Cambridge, Mass.

Boston was still adjusting to its new bank signs - FleetBoston Financial Corp. was bought by Bank of America Corp. in Charlotte, N.C., last year - when the newest buyout was announced. The $57 billion acquisition of Gillette could result in 6,000 layoffs, but it is still unclear how many jobs will leave the Boston area. It is also uncertain how Gillette's corporate giving will be affected.

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