Fidelity to shift jobs from state

Fidelity Investments said yesterday it plans to move up to 1,500 jobs out of Massachusetts by 2008, a step likely to reignite a regional development rivalry among New England states.

Fidelity spokeswoman Anne Crowley said the mutual-fund giant told roughly 800 employees of its personal investments group that their jobs will move to locations in Rhode Island in stages by 2008.

Between 400 and 700 additional employees at other units will be shifted elsewhere as well by 2008, Crowley said, some potentially to a company site in Merrimack, N.H. The jobs to be affected are currently located in Boston and Marlborough.

The moves were prompted partly by a business reorganization and the expiration of several office leases, she said. The job departures represent a small portion of the company's total workforce of about 12,800 people in Massachusetts, where it maintains its largest presence. It has nearly 37,000 employees worldwide.

But Fidelity has steadily added jobs elsewhere, including Texas, Ohio, and Kentucky. Lately Rhode Island has led the charge, offering a variety of financial incentives to get Fidelity to bring more workers to its growing campus in Smithfield.

So far Fidelity has put 1,600 jobs there, and on July 29 it said it would invest an additional $65 million to build a third building at the site.

Fidelity may move even more jobs to Rhode Island soon, said Hank Devine, sector leader for the Rhode Island Economic Development Corp., the state agency encouraging the moves. Devine said he plans to meet with Fidelity executives next week to discuss further steps.

''We're encouraging them to think about how they can locate some of the higher value-added businesses here, especially those which speak to the more innovative areas of asset-management, like new consumer products," Devine said. Specifically, he said, Rhode Island will try to lure the company's highest-paying jobs.

''I'm more focused on getting the higher-value jobs," Devine said. ''I'd rather have 200 high-value jobs than 600 mundane jobs."

In Massachusetts, a spokesman for Governor Mitt Romney's economic development secretary, Ranch Kimball, said that his office has been in talks with Fidelity to try to prevent the job losses. The administration proposed alternative locations for offices, ''but Rhode Island was in a position to offer them incentives," said the spokesman, Joseph Donovan.

He said Romney has proposed the creation of similar tax incentives in a stimulus bill that the Legislature has not acted upon. But, Donovan said, ''Even with the incentives, Fidelity expressed a strong desire to diversify the geography of their employment."

Boston Mayor Thomas M. Menino has spoken with Fidelity recently and expects more meetings in coming weeks, said spokesman Seth Gittell.

The talks will be the latest between Fidelity, one of the state's largest employers, and government officials anxious to keep both its well-paying jobs and its lucrative tax payments. In 1996 the state passed a tax break worth $40 million annually for the mutual-fund industry, conditioned on companies increasing employment 5 percent a year in Massachusetts for each of the next five years. Fidelity, and other companies, met that goal, then shed some employees amid a broader industry downturn several years ago but kept the tax break under the terms of the law.

Crowley noted that the company continues to hire workers in Massachusetts despite the departures to Rhode Island -- it listed more than 200 open jobs in Boston on its website yesterday.

''We're still going to be one of the few large companies in this city that still maintains its corporate headquarters here. We're here, and we expect that to continue," she said. Rhode Island's economic incentives were only one of a host of factors in the company's thinking, she said, as were the room to grow in the state and the security of a spread-out geography.

Ross Kerber can be reached at kerber@globe.com.