Rumors of layoffs at Fidelity were true in substance but exaggerated in scale. The Boston Behemoth said today it will cut 760 workers, or a little more than two percent of its 32,493 workers. The cuts will come from across the firm, but the largest share will be in the firm's brokerage unit.

Speculation that Fidelity was on the verge of layoffs has been circulating for months. Reports in Boston papers and from sources close to the firm were that senior managers had been asked to prepare plans identifying potential cuts in case they were needed.

Fidelity explained the decision to make cuts in light of the decline in trading volume in the market and the declining economy in general. The layoffs are not, the firm was careful to point out, an across-the-board cut. Rather they were a response determined by each business unit head.

"None of the reductions announced today are the result of an across-the-board order. That is not the way Fidelity does business. These difficult decisions were made independently by each of our operating businesses after a careful assessment of current business conditions and future staffing needs. This will allow our operations to handle current business and future growth when and where it may arise," said the statement.

It added that "For more than a year now, there has been volatility in the equity markets and the economy has slowed significantly. A broad range of industries including financial services has felt the impact of the slowing economy. Many of Fidelity's businesses likewise have been affected."

"Throughout the year, Fidelity's various businesses have been working very hard to make certain they are running efficiently, while at the same time continuing to provide a full complement of products and services for our customers. The collective efforts of our various business units have enabled Fidelity as a whole to continue to invest in our business, our technology and our people even in the face of the significant events of the past year," it adds.  

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