Last Update: March 12 @ 10:29 PM
financial services
Fidelity exec says ‘big layoffs’ are over
No. 2 Lawson argues firm weathered downturn successfully
BLOOMBERG NEWS FILE PHOTO / JB REED
FIDELITY HAS CUT its work force by 7 percent to 38,000 since the stock market crashed last September.


BOSTON – Fidelity Investments is “done” with major layoffs after cutting roughly 3,000 jobs since last October, company president Rodger Lawson said yesterday during marathon interviews with local and national news outlets.

Lawson, Fidelity’s No. 2 executive, told the Boston Herald that some jobs may be cut due to “routine” churn, but large-scale work force cuts are over for now.

“We’ve done what we need to do,” he said in a separate interview with The Boston Globe. “The days of the big layoffs are gone,” he told Reuters.

However, Lawson also told The Wall Street Journal that Fidelity is unlikely to do much hiring anytime soon. “I don't see our head count growing a lot” over the next few years, he said.

Fidelity has about 38,000 employees today, down from roughly 41,000 before the economy hit the skids last year. It is one of the largest employers in New England, including more than 3,000 people at its sprawling campus in Smithfield. Last month, Fidelity said it would shift another 500 workers there from offices in Marlborough, Mass.

Fidelity said yesterday its investments under administration rose to $2.8 trillion in the first seven months of this year, up from $2.6 trillion on Dec. 31, while assets under management increased 9 percent to $1.4 trillion. The company saw $44.2 billion in net investment inflows into its accounts in the first half, especially money-market accounts, as investors sought safe havens.

“We’ve come through this crisis very well,” Lawson told The Globe, although the company’s revenue continued to decline in the first half of this year. Fidelity’s profit sank 18 percent to $2.36 billion in 2008.

However, Christopher Davis, a fund analyst at Morningstar, said the growth in Fidelity’s money-market funds masked stagnation in its equity and bond funds.

“A lot of their equity funds have bled assets,” Davis told The Globe. “They have compensated for that shortcoming in one area with growth in another. It doesn’t mean that Fidelity as an investment manager is gaining increasing favor with investors.”

In a separate interview with Bloomberg News, Davis added: “I think that Fidelity’s reputation rests to a large extent on its past glories.”

Lawson, 62, also pushed back against reports that he is preparing to leave the company. A Fidelity executive from 1985 to 1991, Lawson left for Prudential Financial Inc. until 2007, when he was brought back to Fidelity by chairman and CEO Edward C. “Ned” Johnson III, now 79, whose father founded closely-held Fidelity in 1946.

“I will stay with Fidelity as long as it needs me,” Lawson told Bloomberg, but added: “I don’t see myself here when I’m 72.” A succession plan was being worked on with the company’s board, he said.

Lawson also told Reuters the Johnson family has no plans to sell Fidelity. “We are not trying to sell the company and as far as I know it will always remain a private company,” he said.

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