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Fidelity trims more jobs, this time through layoffs

A Fidelity Investments office in Boston’s Financial District on Tuesday.Nicholas Pfosi for The Boston Globe

Just weeks after more than 1,500 Fidelity Investments workers accepted voluntary buyout offers, the Boston-based mutual fund manager is trimming its payrolls again. And the departures aren’t voluntary this time around.

A source familiar with the layoff plan said less than 1 percent of the national workforce was affected, as well as less than 1 percent of Fidelity’s personnel in Massachusetts. The company currently employs about 45,000 people globally, mostly in the United States. About 5,000 employees work in Massachusetts.

Fidelity spokesman Vincent Loporchio declined to specify how many employees are losing their jobs.

Fidelity is known for its actively managed mutual funds, which have fallen out of favor in recent years as investors seek lower-cost passively managed funds. These less-expensive funds often trade in tandem with a stock or bond index.


Katie Reichart, an associate director of research at Morningstar, said investors pulled about $4 billion from Fidelity’s mutual funds during the first five months of the year. Gains in Fidelity’s passive funds were more than offset by withdrawals from its active funds, she said.

“It’s been a tough environment for Fidelity,” Reichart said. “Investors often think of them as an actively managed shop. That’s worked against them. . . . I think they’ve definitely felt some headwinds from the outflows.”

Loporchio noted that Fidelity still has hundreds of open positions that the company is looking to fill nationwide, including many in Massachusetts.

He stressed the company’s diversified revenue streams and its growth trajectory. Fidelity reported $15.9 billion in revenue last year, an increase of 3.4 percent. The revenue growth and a slight reduction in expenses contributed to record operating income of $3.5 billion in 2016, a 19.5 percent increase from 2015.

In her annual letter to shareholders for 2016, chief executive Abby Johnson wrote that Fidelity had begun a “new multiyear program to drive efficiency across the company.”


Along those lines, more than 1,500 Fidelity workers accepted voluntary buyouts last month. All were at least 55 years old and had been with the company for at least 10 years. More than half of the eligible employees accepted buyout packages.

As of May, Reichart said, Fidelity managed about $1.3 trillion in its mutual funds — a number that doesn’t include money market funds or funds of funds. That puts Fidelity in the No. 3 spot in terms of size after Vanguard and American Funds, she said.

Jon Chesto can be reached at jon.chesto@globe.com. Follow him on Twitter @jonchesto.