Sept. 30, 2002 — Mutual fund giant Fidelity Investments said it will eliminate 1,695 jobs, or about 5.4% of its work force, because of the falling stock market.
The cuts were made throughout the company, but no fund managers or analysts are being fired, a Fidelity spokesman said. The latest layoffs follow the company’s announcement last October that it would cut 760 jobs, or 2.3% of its work force.
The latest layoffs come as Fidelity’s assets under management, on which its management fees are based, have fallen. The company said it was overseeing $776 billion at the end of August, compared to $883.4 billion on Dec. 31, 2001.
The company noted that its business is cyclical, and “when the market rolls back as it has over the last three years, the company needs to adjust the business to align its resources with the new market environment.”
Fidelity observers said that although they had expected the company to eliminate positions, the layoffs were more modest than anticipated, and smaller than those disclosed by other financial services companies in the last two years. For example, they noted that Schwab(Charles)Corp (SCH) slashed its work force by 13% in 2001.
“I’m surprised that the cuts weren’t a little bit steeper than they are,” said John Bonnanzio, editor of Fidelity Insight, a newsletter.