Fidelity International to trim 16% of China fund unit jobs: Report

Fidelity International layoffs: Fund manager Fidelity International (FIL) is planning to reduce its workforce by 16 per cent at its primary China unit, news agency Reuters reported, quoting sources familiar with the matter. The downsizing initiative comes amidst a downturn in China's markets and as the firm undertakes staff cuts globally.

The proposed layoffs at FIL's wholly-owned China fund unit, currently employing 120 staff, are expected to affect approximately 20 individuals, the sources revealed, requesting anonymity as they were not authorised to speak to the media.

Earlier this month, the London-based fund house initiated a broader cost reduction program worldwide, aiming to achieve savings of around $125 million in 2024 and eliminate 9 per cent of its workforce.

In response to inquiries about the China unit, a spokesperson for FIL stated that a review of previously reported global role reductions is underway across business lines and geographies, emphasising that no decisions have been finalised regarding its China operations.

The downsizing move in China highlights the complexities faced by global asset managers in navigating uncertainties within the world's second-largest economy. Recent stock market fluctuations and challenges in the property sector and local governments have significantly impacted investor confidence.

FIL obtained regulatory approval in late 2022 to operate in China's $3.7 trillion mutual fund industry. Presently, the unit oversees three fund products with assets totaling 6.7 billion yuan ($931 million) as of January-end, as per company reports.

China's mutual fund industry comprises over 150 companies, including foreign asset managers such as BlackRock, Schroders, and JPMorgan Asset Management. Foreign financial firms were granted permission to operate their local businesses through wholly-owned entities in 2019.

Fidelity International, formerly the international investment arm of Boston-based Fidelity Investments, underwent a spin-off from its parent company.

(With Reuters inputs.)