Pfizer pharmaceutical company plans for Tax break

Pfizer, the world’s largest pharmaceutical company, plans to lay-off or relocate up to 1,400 New York City employees, seven years after receiving millions of dollars in tax breaks to create jobs in the city.

The company, which has already scrapped about 2,000 positions, also put its office tower at 685 Third Avenue up for sale. Pfizer officials said the company’s world headquarters would remain in the office tower at 235 East 42nd Street, near Grand Central Terminal. The company, which has been based in New York City since its founding in 1849, has about 4,400 employees here.

But the company’s decision is a remarkable turnabout in Pfizer’s once robust expansion plans for New York and an embarrassment for Mayor Michael R. Bloomberg and state officials who had provided the drug-maker with the tax breaks in 2003.

Government officials often give the breaks, or what critics call corporate welfare, to companies that forgo plans to leave the city, or that invest in new equipment and jobs. But some economists argue that those scarce resources could be better spent on transportation, education and other things that create a better environment for all employers. Major companies don’t make location decisions based on tax breaks.

The Bloomberg administration has been far stingier than Mayor Rudolph W. Giuliani’s was in granting tax breaks to corporations threatening to leave New York. It has also worked to strengthen the penalties for companies that violate job-retention agreements.

Under the terms of its deal with Pfizer, the city will seek to recover double the $12 million in tax breaks that the company ultimately used if Pfizer eliminates more than 450 jobs. Pfizer bought another major pharmaceutical firm, Wyeth, last year in a $68 billion deal. Pfizer reported better than expected earnings in the first quarter of the year.