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Thursday, November 06, 2008

Fidelity Plans More Cuts in Early 2009

Reported by Sean Hanna, Editor in Chief

Fidelity is preparing another round of layoffs. Executives at the Boston Behemoth revealed that they are preparing for another round in a statement on the fund firm's Web site Thursday.

The announcement also confirmed a 2.9 percent cut from its 44,000 member workforce that was widely reported last month.

The next layoff will take place in the first quarter of next year, according to the statement. It added that "the details of which will be finalized over the coming weeks."

The statement did not specify from which units the cuts would come.

The cuts at the firm are not a surprise as the bulk of Fidelity's revenues are asset-based, meaning that the fund firm will see revenues fall along with the stock market. The statement called the current market "extraordinary times."

The statement adds that "The firm's division leaders have already taken a number of steps to implement efficiencies in their organizations and to properly align available resources ..."

The MFWire has learned that those efficiencies include the consolidation of the firm's 403(b) call centers. Fidelity also recently sold its Canadian defined contribution business to Great-West.

To some observers the cuts suggest that Fidelity's leadership under Rodger Lawson is taking a more conservative approach to ensure profitability in the manner of a public company rather than a family-owned enterprise.


MEDIA ADVISORY

Fidelity Investments announced today that its business units will begin to implement expense reduction activities that will commence with a layoff later this month of about 2.9 percent of its 44,400 employee workforce. Fidelity also announced that it will have a second layoff in the first quarter of next year, the details of which will be finalized over the coming weeks.

Global economic conditions and the unsettled nature of the world's stock markets all year long have required businesses around the globe and across all industries to examine their operations and make adjustments. Fidelity executives have been carefully reviewing their work units and prioritizing their business initiatives in order to ensure the company is well-positioned for the future.

The firm's division leaders have already taken a number of steps to implement efficiencies in their organizations and to properly align available resources to make certain that Fidelity continues to provide the same superior service and quality products that the people who do business with us expect and deserve.

These are extraordinary times, and while Fidelity remains strong and growing, prudent management warrants that we carefully examine all of our costs to make certain we come out of this economic downturn in a position to capitalize on opportunities for our customers.

Though we regret having to implement any expense reduction that impacts valued employees who have made substantial contributions to our success, we believe this staffing adjustment is necessary.

About Fidelity Investments

Fidelity Investments is one of the world's largest providers of financial services, with custodied assets of $3.0 trillion, including managed assets of $1.4 trillion as of September 30, 2008. Fidelity offers investment management, retirement planning, brokerage, and human resources and benefits outsourcing services to 24 million individuals and institutions as well as through 5,500 financial intermediary firms. The firm is the largest mutual fund company in the United States, the No. 1 provider of workplace retirement savings plans, the largest mutual fund supermarket and a leading online brokerage firm. For more information about Fidelity Investments, visit www.fidelity.com.
 

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