Fidelity Investments, the nation's biggest mutual fund company is laying off 226 employees, or 3.3 percent of its staff, in yet another sign of deterioration in the financial services component of New England's troubled economy.
The company, which blamed the cuts on recession and "international conditions," said 12 of those are in the Salt Lake City regional office, 175 E. 400 South, and 151 of those eliminated were in Boston. Another 30 were eliminated in Dallas, another city where it has customer service telephone operations.Gretchen Anderson, operations director for the Salt Lake office, said the layoffs are primarily in the staff and support functions and are effective immediately. She said some seasonal employees, hired during the tax seasons, also are affected.
She said the reduction is a small percentage of the nearly 500 employees in the Salt Lake operations and added that it is better to make adjustments now and keep the company financially viable than have to lay off thousands of people in the future as other financial organizations have.
Anderson said the layoff won't affect customer service.
Financial services industry jobs have steadily declined in Boston in the past few years as investment firms have cut back in the wake of the 1987 stock market crash and, more recently, many of the region's banks, reeling from a collapsing real estate market, have slashed staffs or even been closed.
Fidelity said its staff reductions "were highly selective, focusing on processing and volume-related operations with excess capacity, staff areas and other non-investment functions."
Edward C. Johnson, chairman, said the privately owned company made the cuts as "one of many cost-control measures Fidelity is undertaking in order to maintain an adequate level of profitability in 1991."
Only last month, Fidelity said a survey it conducted showed the investment business was likely to improve. "Investors appear to be getting ready to get back in the market after being on the sidelines since the fall," Michael Hines, a vice president of marketing for the company, said when the survey was released at the end of December.
But on Wednesday, Johnson, in an apparent reference to the war in the Middle East, said investors are fraught with uncertainty again.
"With the economy in recession and international conditions futher dampening public confidence, the activity of individual investors has slowed considerably," Johnson conceded.
He said the company had begun "reducing expenses in many budgetary categories."
Fidelity, long a bright light in Boston's important financial services industry, has reduced its employment levels steadily from a high of 7,573 in December 1987, just two months after the October stock market crash that year. The latest layoffs reduce its work force to 6, 670, down 12 percent from that high more than three years ago.