Fidelity International (FIL), a fund management company, is reportedly planning to cut 500 jobs in its China business division, according to exclusive information from two sources disclosed to Reuters. This marks the largest scale of layoffs by international financial companies in China in recent years.
The sources revealed that the UK-based Fidelity International notified a technology and operations center in Dalian on Monday, October 21st, about the layoffs. The sources, who declined to reveal their identities as they were not authorized to speak to the media, shared this information.
Fidelity International’s “center of excellence” in Dalian provides extensive technical support to meet operational and investment needs. According to official business records, the entity was established in 2011 and had 574 employees by the end of 2023.
In a statement to Reuters, Fidelity mentioned, “Through an evaluation, we are streamlining certain management capabilities in Dalian in line with the organization’s focus on improving efficiency.” The company declined to comment on the exact number of job cuts.
Fidelity International, previously the international investment division of Fidelity Investments based in Boston before its split in 1980, has been focusing on providing investment management services to private and institutional investors such as mutual funds, retirement fund management, and fund platforms.
The layoffs at Fidelity International in China underscore the challenges faced by global asset management companies in dealing with economic uncertainties in China. Stock market volatility, real estate distress, and local government debt crises have deepened, impacting investor confidence.
Reuters had reported in March that Fidelity International planned to lay off 20 employees at its Chinese subsidiary. At that time, the wholly-owned Chinese fund department of Fidelity International had 120 employees. Concurrently, Fidelity International also began layoffs globally, aiming to cut 9%, or around 1,000 positions. It’s noted that the scale of layoffs in China is more significant, accounting for approximately 16% of the total workforce.
According to The Wall Street Journal’s report last Thursday, McKinsey, a US consulting company, is undergoing a comprehensive reform of its operations in China, cutting around 500 jobs, roughly one-third of its total workforce on the mainland. Previously, the company had reduced the number of clients related to the Chinese government.
Apart from economic softness, McKinsey faces significant challenges in China, including Beijing’s crackdown on foreign consulting firms conducting due diligence and information collection. Last year, Chinese authorities conducted sudden searches at the Shanghai offices of prominent US strategy consulting firm Bain and the offices of consulting firm Capvision.