Fidelity in new round of layoffs
Fund giant's action is the 3d since November
Fidelity Investments confirmed yesterday that it has undertaken another round of layoffs, the third at the Boston mutual fund giant since November under a new president who has stressed cost controls.
Spokeswoman Anne Crowley declined to specify the total number of people let go except to call it "a very small percentage" of the company's total workforce of 46,000 people, and said the impact in Massachusetts was "very small."
Workers were told Tuesday if their jobs were being eliminated, she said. Employees being let go mainly worked in two units: Fidelity's personal and workplace investing division, which operates retirement savings plans like pensions and 401(k)s for other companies, and its human resources services division that companies hire for tasks like payroll operations.
A number of corporate human resources jobs also will be cut, she said.
No cuts were made at Fidelity's core money management unit, which operates its mutual funds. Retirement savings dollars have continued to stream regularly into those accounts, sparing the industry from the wave of layoffs that has struck many other financial services sectors in the worldwide credit crunch since last year.
In Washington, a fund industry trade group, the Investment Company Institute, said it doesn't have figures for 2008 so far but said the industry added 21,000 workers in the three years ended Dec. 31, 2007, finishing at a record high of 168,000 people. Other major Boston investment companies including MFS Investment Management, and Putnam Investments also say they haven't had layoffs this year.
Operationally, Fidelity has been on a tear, with 2007 pretax income rising 22 percent last year to $2.2 billion, and its mutual fund performance improving. Fidelity is much larger than the other Boston firms, however, and has expanded aggressively into business areas with lower profit margins.
In a companywide memo last fall distributed shortly after his arrival, Fidelity president Rodger A. Lawson emphasized the need to keep costs under control as a way to maintain competitive pricing. Crowley said this week's layoffs weren't the result of a companywide directive, but rather were made by divisional leaders as part of a restructuring that took place last year, which created the two divisions where the bulk of the layoffs are occurring.
Personal and workplace investing's president, Abigail P. Johnson, is the daughter of Fidelity's 78-year-old chairman, Edward C. "Ned" Johnson III. Much of the human-resource services work reported to Abigail Johnson until last year's restructuring, and now reports to unit president Patrick Goepel.
In all, Fidelity now has about 12,000 employees in Massachusetts. In recent years it has been growing in other states. It still lists several hundred open positions on its website.
In February, Fidelity said it would lay off 250 people following the restructuring that created the personal and workplace investing units. In November it sent layoff notices to about 200 people.
In April, BostonCoach, the limousine company Fidelity controls, cut 45 jobs as it closed a call center in Everett and switched its business to a Canadian call center operator.
Ross Kerber can be reached at kerber@globe.com.
