Fidelity Investments Cut Undisclosed Number of Jobs
Fidelity Investments, a U.S. financial services company known for its brokerage and mutual fund services, has laid off an undisclosed number of employees this month. The number could be in hundreds.
These layoffs followed weeks after Fidelity offered 3,000 employees voluntary buyouts. That number accounts for 6.7% of the company’s global workforce. Fidelity Investments runs brokerage, wealth management, and mutual fund businesses across the globe and employs a workforce of roughly 45,000 employees worldwide.
Employees who received the offer had served the company for a long tenure. The buyout offer was made to employees who were at least 55 years old and had served the company for at least 10 years. The offer included six months to more than two years worth of salary, and an additional bonus.
It is believed that nearly half of the employees who were offered the package accepted the voluntary buyout. That left about 1,500 employees who did not accept the offer. It may be safe to assume that the current layoffs include employees who declined to take the safe exit.
At the time that Fidelity made the buyout offer, a company spokesperson said, “Our strong financial health allows us to offer this generous voluntary opportunity to our employees.”
Following the current layoffs, the company has reiterated, “We are a very healthy company that continues to grow, and our record 2016 earnings underscore this fact.”
Fidelity may feel pressured to take the drastic step to cut its costs as industry trends are gradually shifting. Fidelity Investments is known for its actively managed investment funds which require investors to pay higher fees when compared to passively managed funds.
Many Americans are now choosing to invest in passively managed funds to save on fund manager fees. To stay competitive, Fidelity Investments is also reported to be slashing its fees. This is consequently going to hurt its profit margins. With margins shrinking, the company must resort to cost-cutting in order to save its bottom-line numbers.
“Exclusive: Layoffs at Fidelity Investments,” Axios, July 11, 2017.
“Fidelity Investments Offers Buyouts to 3,000 Older Workers,” The Wall Street Journal, Feb. 28, 2017.