(Bloomberg) -- Fidelity Investments is offering buyouts to 3,000 veteran employees to reduce costs and open opportunities for newer staff, according to a person with knowledge of the matter.
Employees who are 55-years old by June 30 and have worked 10 years at Fidelity will be eligible for the offer, said the person, who asked not to be named because the information is private.
The packages will include extended health-care coverage and at least six months of salary. The proposal covers about 6.7 percent of the firm’s 45,000 employees.
Asset managers are reducing expenses as money flows out of active products, which charge higher fees, into lower cost passive funds. Fidelity’s active equity mutual funds saw $57.7 billion in redemptions last year, while its index funds attracted $16.1 billion.
Other big players in the industry have cut jobs and reduced pay. BlackRock Inc., the world’s largest money manager, State Street Corp. and Pacific Investment Management Co. are among companies that have reduced staff.
Steve Austin, a spokesman at Fidelity, declined to comment.
Fidelity Chief Executive Officer Abigail Johnson wrote in the firm’s annual letter that the move by investors into low-cost indexing has created a more difficult world for money managers. Even with those challenges, Fidelity said its operating income increased 20 percent to $3.5 billion as a rising stock market boosted assets and the firm trimmed expenses.
The Boston Business Journal earlier reported on Fidelity’s plans.
Copyright 2018 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.
Your access to unlimited BenefitsPRO content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking benefits news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
