Investment giant Fidelity International plans to cut about 20 positions in China as part of global job reductions to trim costs, according to people familiar with the matter, a move that could potentially slow its expansion in the local 27 trillion yuan (S$5.1 trillion) mutual fund market.
The number of layoffs is still being finalised and the cuts may start in the coming days, said the people, who asked not to be identified as the matter is internal.
“No decision has been made and a review across all geographies and business lines is ongoing,” Fidelity said in a statement. “Our long-term commitment to the China market is unchanged.”
The asset manager is planning to slash 1,000 jobs globally in 2024, or about 9 per cent of its staff across all business lines and regions, to adjust for a more challenging economic environment, the company said earlier in March.
The sector has been buffeted over the past two years, first by declines in stock and bond markets in 2022 and then by investors who grew skittish over higher interest rates.
Other big money managers, including BlackRock, Wellington Management and T. Rowe Price Group, have also cut jobs and redirected budgets in response.
In China, asset managers are navigating an increasingly challenging business landscape due to tightening regulatory scrutiny and local competition. A number of firms have retreated from the mainland market, including Vanguard Group, Van Eck Associates Corp and Matthews International Capital Management.
Still, other global firms, including BlackRock and Fidelity, have been stepping up efforts to capture the local growth potential, as wealthy customers shift assets away from properties and the government quickens the pace to develop the pensions market for an ageing population.
Less than one year ago, Mr Rajeev Mittal, managing director for Asia-Pacific ex-Japan at Fidelity, told Bloomberg that the company was seeking to add branches in different Chinese cities over the coming 18 months and hire more people to boost distribution, research and investment capabilities.
He also said the firm expects to make money from the fledgling onshore mutual fund business in “not too distant a future”.
Fidelity won approval to start the wholly owned business in Shanghai in late 2022, and has since launched three funds. The company has also set up a Beijing branch, and raised its registered capital earlier in 2024, as it prepares for further growth.
Fidelity has been in China since 2004 and has a local staff count of almost 2,000 people, mostly in technology and operations. The company said in 2023 that its Shanghai unit, which runs the mutual fund, had doubled its headcount to 120 over the previous two years. BLOOMBERG
