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

Credit: REUTERS/FLORENCE LO

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;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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