Fidelity Investments will eliminate 1,700 jobs early next year in a second round of cuts at the largest US mutual fund company, which has seen its money management fees decline along with the markets.
Combined with 1,300 cuts that Fidelity announced last week, the second round disclosed on Friday would eliminate about 7 percent of the company’s work force of about 44,400, said Anne Crowley, a spokeswoman for Boston-based Fidelity.
Details on which jobs are to be cut in the second round haven’t been worked out. But the cuts would be spread roughly proportionally across Fidelity’s operations, with the reductions occurring sometime in the first three months of next year, Crowley said.
FIRST ROUND
In the first round, which is taking place this month, layoff notices began going out earlier this week, affecting management positions as well as lower-level jobs at privately held Fidelity. No fund managers or investment analysts are being laid off in the first round.
Crowley said on Friday it was too early to say whether that would be the case in the second round.
In a letter distributed to employees describing the initial cuts, Fidelity president Rodger Lawson said recent market volatility had hurt company revenue, leading him to conclude that “many of the cost improvement plans which would have been phased in by our business units over the next three years need to be accelerated.”
The latest cuts are in addition to reductions totaling about 800 jobs in two rounds earlier this year after Fidelity reorganized some business units.
Cuts also have been announced in recent weeks at smaller mutual fund firms including Janus Capital Group Inc, which is eliminating about 115 jobs, or about 9 percent of its work force.
CITIGROUP
Separately, Citigroup spokeswoman Shannon Bell said on Friday the company would make further job cuts to cope with the financial crisis.
She declined to confirm a Wall Street Journal report of 10,000 job cuts.
“We have said consistently that we will reduce expenses, including through staff reductions,” she said.
“We are showing good traction on cutting our expenses; and we are selling businesses and shedding assets that don’t fit our strategic profile,” Bell said.
“We will continue to carefully manage our head count levels as we re-engineer the company in line with our stated goal and market realities,” she said.
Citigroup has already announced plans for 22,000 staff reductions and has eliminated at least 13,000 so far this year, company figures show.
Last month, Citi reported a third-quarter loss of US$2.8 billion, its fourth straight quarter in the red.
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