Fidelity may see job cuts

Fidelity Investments acknowledged today it is studying cost-cutting but declined to comment on an industry report that it plans to lay off as many as 4,000 employees as plunging stock markets cut into the value of its mutual funds business.

The online trade publication Ignites.com, citing unidentified sources, reported today that Fidelity plans two sets of layoffs in the coming weeks--1,500 before the end of the year, and another 2,500 early next year. The job reductions would be focused on back-office staff, Ignites said.

A person who has spoken with Fidelity executives involved in the planning process confirmed to the Globe the firm is considering cutting as many 4,000 people, but from throughout the company, including jobs that work with customers and in its core mutual funds business. At any investment company with declining assets, "there has to be some type of adjustment,'' this person said, who also requested of anonymity because of the sensitivity of the situation.

Fidelity spokeswoman Anne Crowley would not comment on the layoff predictions, but said company officials are poring over expense sheets.

"Our business leaders are evaluating all of their operations, company by company and division by division to make sure they're well-positioned for the future,'' Crowley said. Some new hiring also has been frozen, she added.

In addition to running the world's largest mutual fund complex, Fidelity provides retirement plan and other administrative services for companies. Investment management operations get paid on the value of the assets they have under management. So when stocks lose value, as they have to a whopping 40 percent so far this year, or when customers withdraw funds, the investment managers get paid less.

Fidelity's chief executive, Rodger Lawson, emphasized cost-cutting since he was brought in to head the family controlled firm last year. In the last 12 months, Fidelity has reduced employment by around 1,000. It employs 46,000 worldwide, including about 12,000 in Massachusetts.