Finance

Fidelity’s enterprise cloud computing group has been hit by job cuts following a leadership shuffle

  • Fidelity Investments has cut roles in its enterprise cloud computing (ECC) unit, according to two people familiar with the matter. 
  • The privately held firm’s unit told employees that they could either try to find other positions internally or leave the firm, according to the one of the people. 
  • Separately, at least two senior leaders within the business line — the unit’s former head and the head of enterprise cloud computing architecture — exited earlier this year. The ECC unit builds out a central cloud solution for the firm’s different business lines. 
  • Boston-based Fidelity is one of the world’s biggest asset managers, and also has massive brokerage and retirement plan operations. The job cuts come as brokerages and asset managers have been facing intense pressures when it comes to commissions and fees. 
  • Contact this reporter at rungarino@businessinsider.com or on the secure app Signal — number available upon request — using a non-work phone.
  • Visit BI Prime for more asset management and wealth management stories.

Fidelity Investments has eliminated roles in its enterprise cloud computing group, according to two people familiar with the matter, and the move comes after the group saw senior leadership exits earlier this year. 

As many as 100 roles within the centralized group known as ECC were affected, and included cloud technologists and engineers, the sources said.

The firm told some of the employees impacted by the ECC changes that they could either try to find positions in other internal groups at Fidelity (meaning the net number of job cuts could be lower than 100) or leave the company, according to the sources, who requested anonymity because they were not authorized to speak with the press.  

Boston-based Fidelity is one of the world’s biggest asset managers, and also has massive brokerage and retirement plan operations. The job cuts come as brokerages and asset managers have been facing intense pressures when it comes to commissions and fees. 

The job cuts were first announced in October, one of the people said, and will be effective at the end of December. Business Insider could not confirm each location the cuts impacted. 

Separately, at least two senior leaders earlier this year exited ECC, which builds out a central cloud solution for the firm’s different business lines. 

The ECC group works out of regions including Raleigh, North Carolina; Dublin, Ireland, and the Dallas/Fort Worth, Texas area. 

Fidelity, which is privately held, has 10 regional offices and some 40,000 employees in North America, Europe, Asia, and Australia. It had assets under administration of $8.2 trillion, including discretionary assets of $3.1 trillion, as of November 30, 2019. The firm is helmed by chief executive Abigail Johnson, the third generation of the founding family to lead Fidelity.

Fidelity declined comment on specific numbers for job eliminations.

“We actively manage our business and, from time to time, our individual businesses may be making adjustments to their staffing levels; some may be adding employees while others may be reducing,” Fidelity spokesperson Nadil Ashour said.

“Currently we have well over 1,000 job openings at Fidelity, including in the cloud computing space,” he said, noting that there are currently 65 posting that feature a cloud skill set in the role. 

Fidelity employs cloud engineers in business units other than ECC — for example, Fidelity Brokerage Technology is currently advertising an opening for a head of cloud architecture role. 

The ECC unit’s former head, Michael Baker, left in April to join MarketAxess, a New York-based firm that operates an electronic trading platform for fixed-income securities, as its chief technology officer.

At Fidelity, Baker had been responsible for the firm’s digital and agile transformation to the cloud, according to a statement from MarketAxess announcing the move. He had also supported the development of cloud security, governance, and operations across Fidelity’s business units, the statement said.

Joe Frazier, a nine-year Fidelity veteran, took on the role of head of ECC in May, according to Frazier’s LinkedIn profile.

And Richard Moran, a two-decade Fidelity veteran, left the firm in August as its chief architect for enterprise cloud computing to join MassMutual as its head of enterprise architecture, according to his LinkedIn profile.

Financial services firms have had to balance tech spending and investment that could ultimately save money against cutting near-term costs.

Companies from big banks like JPMorgan to digital payment firms like PayPal are increasingly embracing public cloud strategies. And senior technologists at banks, hedge funds, and asset managers said in a September survey conducted by Refinitiv that they plan to spend nearly half of their technology budgets on the public cloud in 2020. 

In October, Fidelity said it was eliminating online trading commissions for US stock, ETF, and options trades for individual investors and registered investment advisers. That came after Interactive Brokers, Charles Schwab, TD Ameritrade, and E-Trade all nixed online commissions in rapid succession.

Federal Reserve interest rate cuts this year also pressured revenues for brokerages, and many analysts saw the commission wars as setting the stage for industry consolidation.

In November, discount broker Charles Schwab announced it would buy smaller rival TD Ameritrade, and execs at the companies said that the merger would mean job cuts and branch closures. And before the TD Ameritrade deal was announced, Charles Schwab already had confirmed plans to cut 600 jobs — blaming those on a challenging economic environment.

Pressure has been heaping on the asset management industry, too, with costs for basic index products racing to zero. In August 2018, Fidelity announced two index mutual funds with zero expense ratios, and said it was also lowering fees on its existing stock and bond index mutual funds.

The layoffs underscore broader pain across financial services even as stock markets touch all-time highs and the US unemployment rate has dropped to a half-century low. 

Contact this reporter at rungarino@businessinsider.com or on the secure app Signal — number available upon request — using a non-work phone.

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