Fidelity reviewing costs amid talk of big layoffs
BOSTON (Reuters) - Fidelity Investments said on Tuesday it was reviewing its costs and staffing following an industry report that said as many as 4,000 jobs, or about 9 percent of its workforce, could be cut.
The world's biggest mutual fund company, which employs 44,500 people globally, has already reduced its workforce by about 1,000 jobs in three rounds of cuts in the past year, but there have been no cuts in its main money management business.
Mutual fund newsletter Ignites said on Monday that Fidelity was preparing to cut as many as 4,000 jobs in two rounds starting this quarter.
Fidelity spokeswoman Anne Crowley called the report "speculation," but did not explicitly deny it.
"Our business leaders are currently evaluating all of their operations -- company by company, division by division -- to make sure they are correctly positioned for the future," she said in an e-mail.
"Naturally, those reviews include an examination of all of our expenditures, as well as staffing, to determine if they are appropriately aligned for our business needs," she added.
U.S. money managers have announced big layoffs recently as investors worldwide pull record amounts of money from stock mutual funds amid turbulence in financial markets, a trend that will cut deeply into fund companies' earnings.
Investors pulled out a record $104.4 billion from U.S. mutual funds in September alone, according to research firm Lipper Inc. Dismal numbers are also widely expected this month given the continued slide in stock prices.
The industry generates the bulk of its revenue on fee income based on a percentage of assets under management, which have withered in recent weeks.
Janus Capital Group last week said it was slashing 115 jobs, or 9 percent of its workforce, and AllianceBernstein Holding said it would make an unspecified number of cuts, the biggest in its 40-year history.
The cuts are in stark contrast to a hiring binge in the industry between 2005 and 2007 when investment firms added more than 21,000 workers to their payrolls, reaching a record 168,000 employees, according to the fund industry trade body, the Investment Company Institute.
(Editing by Jason Szep and Maureen Bavdek)
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