Fidelity International plan to cut 16% of China fund unit jobs, sources say

Filatex India

19/03/2024 02:51

(Adds FIL China business context in 5-8 paragraphs)
    By Selena  Li and Xie Yu
       HONG KONG, March 19 (Reuters) - Fund manager Fidelity
International (FIL) is planning to lay off 20 people at its main
China unit, two sources familiar with the matter said, a
reduction that coincides with a downturn in China's markets and
as the firm cuts staff all over the world.
    The cuts at FIL's wholly-owned China fund unit, which
currently employs 120 staff, is equivalent to around 16% of its
total headcount, according to the sources, who declined to be
named as they were not authorised to speak to media.
    The firm, which manages $776 billion of client assets,
kicked off a broader cost reduction programme globally earlier
this month which is expected to save around $125 million in 2024
and make 9% of its workforce redundant.
    Asked about the China unit, a spokesperson for the
London-based fund house said a review of previously reported
global role reductions is ongoing across business lines and
geographies and no decisions has been made about its China
business.
    The downsizing in China by FIL underscores the challenges
global asset managers face in navigating uncertainties in the
world's second largest economy, where stock market routs and a
deepening debt crisis in the property sector and local
governments have battered investor confidence.
    FIL secured Chinese regulatory approval to conduct business
in China's $3.7 trillion mutual fund industry in late 2022. The
unit manages three fund products with 6.7 billion yuan ($931
million) in assets as of the end of January, company reports
show.
    China has more than 150 companies in its mutual fund
industry, including foreign asset managers BlackRock  BLK.N ,
Schroders  SDR.L , and JPMorgan Asset Management. 
    Foreign financial companies were permitted to run their
local businesses via wholly-owned entities in 2019.
    Fidelity International was the former international
investment arm of Boston-based Fidelity Investments before it
was spun off.
($1 = 7.1981 Chinese yuan renminbi)

 (Reporting by Selena Li and Xie Yu; Editing by Sumeet
Chatterjee and Miral Fahmy)
 ((Selena.Li@thomsonreuters.com; +852 39525868;))