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November 1, 2007
Fidelity Investments is expected to begin layoffs as soon as today, according to a report in The Wall Street Journal.
One person familiar with the matter told the Journal that 200 employees would be notified of layoffs today.
Additionally, managers have been instructed to begin giving notice to employees in areas including information technology and retirement services, according to the Journal, which cited anonymous sources.
Last year, the company reported an 11% drop in earnings to $1.18 billion, marking the first earnings decline in four years.
The company attributed the decline, in part, to an increasing headcount.
In an effort to show fiscal responsibility, Fidelity's new president, Rodger Lawson, said in a September memo to employees that the company must "curb expenses where they are wasteful, not only to avoid waste, but to compete-and win-against some very tough rivals in an unforgiving marketplace."
Fidelity, which is based in Boston, spent more than $3 billion on technology last year and is considered the biggest spender on technology in the mutual fund industry.
The announcement comes one week after Fidelity announced that it planned to spend $50 million to develop a wealth management technology firm aimed at advisers (InvestmentNews, Oct. 29).
"The division leaders are making the decisions to hire or align resources," said Anne Crowley, Fidelity spokesperson.
The company employs more than 46,000 people, which is 4,200 more than the end of December 2006, she continued.
Fidelity hired more than 500 people in September, she added.
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