Philip Morris leaving NYC.

Philip Morris USA Inc., the domestic tobacco subsidiary of Altria Group, Inc., announced that it will relocate its New York-based corporate headquarters to the Richmond, Virginia area. The move will impact all 682 employees currently based in New York, or about 5% of the company's employees.

"This move will help to streamline our business operations, increase efficiencies and deliver significant cost savings over the long run, benefiting all of our employees and maximizing the return to our shareholder, Altria Group, Inc.," said Michael E. Szymanczyk, chairman and chief executive officer of Philip Morris USA. "This was a difficult decision to make because of our company's long corporate history in New York City and the impact it will have on our employees, but I believe that it is the right decision for our business and all our employees."

This relocation will integrate the company's headquarters employees with the 6,800 employees and critical functions already located in the Richmond area. Philip Morris USA estimates that the relocation will result in annual savings in excess of $60 million, including improved business efficiencies and reductions in business expenses that will result from bringing employees together in the same city. Philip Morris USA estimates that the total cost of the relocation will be approximately $120 million, including compensation to those employees who do not relocate. Philip Morris's relocation is scheduled to reach completion by June of next year.

Philip Morris will bring with it 450 new jobs. The company already has nearly 7,000 employees at its Richmond manufacturing facility. "I applaud Philip Morris USA's decision to strengthen and extend its business relationship with the Commonwealth of Virginia," Gov. Mark R. Warner says in a statement announcing the news. "The company is one of the largest and most stable private employers in the Richmond region."

Fred Cerullo, president & CEO of the Grand Central Partnership told REW, "Although we're certainly disappointed when any part of a business entity - large or small - decides to relocate its employees outside of the Grand Central neighborhood, we are pleased that the newly formed Altria Group will continue to maintain a visible presence in the heart of the Midtown Manhattan community in 120 Park Ave. Altria is an active and generous participant in the management of the Grand Central business improvement district, and we look forward to their continued involvement and support in the future. It's important to note that only one of Altria's units currently at 120 Park Philip Morris USA - is relocating. That division is furthering the consolidation of its operations in Richmond, where a large percentage of its workforce is already headquartered. Altria Group is and will remain a valuable anchor of the Grand Central business community."