Liazon CEO Ashok Subramanian already was planning to double the company’s local workforce as demand grew for the private health insurance exchanges that it operates for businesses.
But after being acquired last November by a global consulting company, Towers Watson, and earning lucrative tax breaks from the state’s Start-Up NY program, Subramanian now expects Liazon to more than quadruple its local workforce, hiring an additional 500 people over the next five years.
“Our growth has been steady. Some might call it spectacular,” Subramanian said Monday after announcing the expansion during a stop in Buffalo by Gov. Andrew M. Cuomo. “This is a new stratosphere.”
Subramanian, co-founder of Liazon, said the ties to the biggest U.S. and global companies that Towers Watson brought to Liazon after acquiring the company in a $215 million deal last November are creating additional opportunities to fuel even faster growth of the company’s workforce than it initially planned.
Cuomo, during a stop at the University at Buffalo’s South Campus on Monday, touted the Start-Up NY program as a way for businesses to tap into the resources and expertise at the state’s public colleges and universities. He announced that eight companies, including Liazon and tablet manufacturer BAK USA, plan to invest $9.9 million in Start-Up NY-backed ventures that will create an estimated 659 jobs.
“SUNY as the catalyst; SUNY as the academic economic engine to drive these programs has worked extremely well,” Cuomo said during the announcement at UB.
Subramanian said the company, which recently moved into the eighth floor of the Fairmont Creamery building, is not planning to move out of the Scott Street building, which still is being renovated. Instead of hiring 20 to 30 new workers a year, the company now will be looking to hire 75 to 100 annually.
“For now, we’re good at the Creamery,” he said. “It’s a five-year period. They’re all not coming in tomorrow. As we run out of space, we’ll have to look at our options.”
Liazon, which expects to invest nearly $5 million in its local expansion, said that it will seek local graduates with skills ranging from computer science to business and accounting and marketing. The company also said that it will pursue research and curriculum development initiatives with local colleges in software development, behavioral economics and other fields.
Liazon is one of eight local companies that have been accepted into Start-Up NY, which allows new and expanding businesses with ties to the state’s colleges and universities to operate virtually tax-free for up to 10 years. The eight companies join eight others that were selected for the program in June.
Businesses in the Start-Up NY program don’t pay state income taxes, business or corporate taxes, as well as property and sales taxes, among other tax incentives. Employees also are exempt from paying state income taxes on their salaries.
Subramanian said he had to do “a fair bit of convincing” to persuade Towers Watson to expand in Buffalo.
“As much as we love and appreciate what we have here, people on the outside don’t think of it,” Subramanian said. “There was a little bit of ‘Huh, why are you in Buffalo to begin with? And why would you want to expand in Buffalo?’ ”
“Programs like this are really are a game changer,” said Subramanian, who noted that Towers Watson could have added work to the consulting firm’s existing sites in Texas or Utah. “It certainly made an easy decision for Towers Watson.”
Meanwhile, BAK USA, a new business that makes tablet computers, plans to establish a Buffalo facility that is expected to create 100 jobs. The company is expected to locate its local facility in the Compass East development at 425 Michigan Ave., which has been designated by UB to be a qualified Start-Up NY site.
BAK said that it plans to invest $840,000 in the new facility. The company said that it will work with engineering students involved with advanced design course work to assist with product development and efficiency.
The company will occupy 10,000 square feet on the top floor of the former Sheehan Hospital building. BAK is expected to start recruiting and training employees by the end of September. The company has a goal of producing 80,000 tablet computers within its first year of operation, with initial plans to hire 13 staff members and 50 operators.
Thomas A. Kucharski, president of the Buffalo Niagara Enterprise business development and marketing group, said BAK would be one of the first tablet PC assemblers in the United States. The BNE has been working with BAK officials since March, he said.