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Written by Serena Lee and Xie Yu
HONG KONG (Reuters) – Fund manager Fidelity International (FIL) plans to lay off 20 people across key divisions in China, two people familiar with the matter said. The cuts are in line with the downturn in the Chinese market and the company’s job cuts. World wide.
FIL’s wholly-owned China funds division currently employs 120 staff, and the job cuts represent about 16% of its total workforce, said the people, who requested anonymity because they were not authorized to speak to the media. He says he will. Officials did not disclose the role of the fired employees.
The company, which manages $776 billion in customer assets, launched an extensive cost-cutting program around the world earlier this month, saving about $125 million in 2024 and making 9% of its workforce redundant. It is expected that
Asked about its China division, a spokesperson for the London-based fund house said a review of previously reported global role reductions was underway across business lines and regions, and that no decisions were yet to be made regarding its China operations. He said that no decision had been made.
FIL’s downsizing in China comes at a time when the world is struggling to navigate uncertainty in the world’s second-largest economy, where a crashing stock market and deepening debt crisis in the real estate sector and local governments have shattered investor confidence. This highlights the challenges facing asset management companies.
The Chinese stock benchmark CSI300 has fallen almost 9% over the past 12 months, hitting a five-year low last month.
Amid these difficult market conditions, Morgan Stanley laid off about 9% of its wealth management staff in China in December, Reuters reported, citing people familiar with the matter.
Matthews International Capital Management, an American asset management company, also announced it would close its Shanghai office.
London-based FIL has secured regulatory approval to operate in China’s $3.7 trillion mutual fund industry in late 2022. The division managed three fund products with assets of 6.7 billion yuan ($931 million) as of the end of January, according to a company report.
The company’s first mutual fund product, FIL China’s equity fund, has fallen 10.1% through Monday since its debut in April 2023, below the 8.6% decline in its set benchmark, according to the company’s official website.
But the firm’s two bond funds, both only a few months old, have so far outperformed their benchmarks.
There are more than 150 companies in China’s investment trust industry, including foreign asset management companies BlackRock, Schroders, and JP Morgan Asset Management.
Foreign financial companies were allowed to operate local operations through wholly owned subsidiaries in 2019.
FIL was the international investment division of Boston-based Fidelity Investments before it was spun off.
(1 dollar = 7.1981 Chinese Yuan)
(Reporting by Selena Li and Xie Yu; Editing by Sumeet Chatterjee and Miral Fahmy)
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