Fidelity Investments, one of the largest financial services firms in the world, has just announced a new round of major layoffs impacting over 11,000 employees globally. This represents around 13% of Fidelity’s workforce and is one of the largest job cuts by a technology or financial company so far in 2022. The layoffs seem to be targeting non-technical roles more heavily, with customer service, HR, and sales departments seeing significant impacts. For fidelity investments and other financial firms, rising interest rates, market volatility, inflation, and recession fears have created strong headwinds. With less trading activity and assets under management, cost-cutting has become imperative. However, not all areas of fidelity investments will see job losses.
Over 11,000 employees laid off in latest round of cuts at fidelity investments
According to Bloomberg, Fidelity Investments has confirmed that they will be laying off around 11,000 employees globally, representing around 13% of their workforce. This makes it one of the largest job cuts announced by any technology or financial services company so far in 2022. Previously, companies like Meta, Twitter, Amazon, and Goldman Sachs announced major layoffs numbering in the thousands. For fidelity investments, these job cuts seem to be targeting non-technical roles more heavily, with customer service, human resources, and sales teams seeing significant impacts. With less trading activity and assets under management in the current environment, the company is looking to reduce costs in customer-facing and back-office areas. However, fidelity’s technology teams, focused on areas like software engineering, data science, and quantitative analysis, appear to be less affected.
Economic downturn creating headwinds for fidelity investments and financial sector
The layoffs at fidelity investments reflect the challenging macroeconomic environment facing the financial services sector currently. With rapidly rising interest rates, high inflation, recession fears, and significant market volatility and losses this year, financial firms are dealing with reduced trading volumes and lower assets under management. This is directly hitting revenues and forcing companies like fidelity investments to cut costs through measures like layoffs. For fidelity’s trading business, lower market volatility means less active trading by clients and lower transaction fees. On the asset management side, declining stock and bond prices have shrunk the total value of assets fidelity oversees. With less revenue coming in, fidelity is aiming to protect profitability through workforce reductions. If the challenging market environment persists, more layoffs in the financial sector are likely. However, not all areas of fidelity’s business have been equally affected.
Technology teams less impacted by fidelity investments job cuts so far
An interesting aspect of the fidelity investments layoff is that the company’s technology teams seem to be impacted to a lesser degree compared to customer-facing and back-office staff. Areas like software engineering, data science, quantitative research, and portfolio management have seen minimal job reductions so far. This aligns with fidelity’s strategic focus on using technology to improve customer experience and develop new data-driven investment products and trading tools. With digital transformation accelerating across the financial sector, fidelity is betting that continued technology investments will give it a competitive edge despite the downturn. Tech workers with skills in high demand areas like machine learning, data analytics, cybersecurity, and blockchain development are still being actively recruited in many cases. However, continued market deterioration may force fidelity to eventually trim tech staff too.
The large-scale layoffs at fidelity investments reflect the challenging conditions in the financial sector currently, with falling asset prices, reduced trading activity, and recession fears forcing cost cuts. Over 11,000 employees globally will be affected across customer service, HR, sales, and other non-tech roles. However, fidelity’s technology teams developing new digital tools and trading systems remain less impacted for now, as part of the company’s strategic focus.