Fidelity to Cut 2.9% of Workforce

Fidelity Investments said November 6 that it would lay off about 2.9% of its worldwide workforce of 44,400, blaming "global economic conditions and the unsettled nature of the world's stock markets." Moreover, Fidelity said it would announce details in the next few weeks of a second round of layoffs that will occur in the first quarter of 2009. The job cuts are part of company-wide cost-cutting measures.

On November 3, privately held Fidelity announced its third-quarter brokerage results, saying it had added a net 200,000 new client accounts during the quarter across its retail, National Financial, and Institutional Wealth Services units, giving it a total of 18.3 million accounts, or a 4% increase over the prior year. The volatile markets helped drive record trading activity during the quarter, with a 19% increase from the prior year to 437,899 daily average commissionable trades.

The company said that 59 breakaway brokers chose to custody "nearly $9 billion" with Fidelity Institutional Wealth Services through the first nine months of 2008, double the rate of 2007. National Financial, Fidelity's clearing arm, said it had added eight broker/dealers to its customer list during the year, seven of which are independent B/Ds, and that it had received inquiries from 160 brokers interested in affiliating with one of National Financial's correspondent B/Ds.