Fidelity offers buyouts to 3,000 older workers

[Midpack]

Looks like (even) discount brokers are cutting costs?

Fidelity offers buyouts to 3,000 older workers - MarketWatch

The packages were offered to 6.7% of Fidelity’s 45,000 employees globally.

 

[LOL!]

More ranks added to the early retired.

 

[rodi]

Interesting. Maybe this is how they're funding their new lower commissions. (as learned in another thread here.)

http://www.early-retirement.org/forums/f44/fidelity-commissions-dropping-85637.html#post1844772

 

[BellBarbara]

More profit for Abby!

 

[bUU]

Interesting. Maybe this is how they're funding their new lower commissions. (as learned in another thread here.)

http://www.early-retirement.org/forums/f44/fidelity-commissions-dropping-85637.html#post1844772

That was my thought... as brokerages are forced to lower their prices to compete with cut-rate competitors, it's prompting a wholesale rush to the bottom.

 

[MichaelB]

All the money going into ETFs and passive funds instead of active must also be hurting Fidelity.

 

[bUU]

All the money going into ETFs and passive funds instead of active must also be hurting Fidelity.

Or at least be hurting their fund managers. Figure that Vanguard makes money off their passive funds and discount brokers make money off of transaction fees for ETFs and such - so can Fidelity, if they simply stop paying for financial expertise that their customers no longer value.

 

[MichaelB]

Fidelity has $2T AUM and around 450K comissionable brokerage transactions per day. Brokerage income from the 450K trades would be around $900M per year. That equals around 4.5 basis points for the assets under management. It is safe to say that Fidelity makes much more money managing assets in their funds than from brokerage services, and the shift away from actively managed funds into passive / ETFs must be pointing to a serious decline in future revenue streams.

This looks like double bad news for them. Projecting a declining revenue stream from their core business, then needing to sharply reduce the price to stay competitive in the business that should benefit from that shift. I'd bet this is not the last RIF we see from Fidelity.
​

 

[eytonxav]

It doesn't really say if this is a RIF or a voluntary program for a pool of eligible workers. Anyhow, welcome to the club of companies that try to replace older higher paid employees with younger lower paid ones.

 

[jazz4cash]

Voluntary as I read it for age 55 with 10 yrs. also says they will backfill the positions.

 

[bUU]

It doesn't really say if this is a RIF or a voluntary program for a pool of eligible workers. Anyhow, welcome to the club of companies that try to replace older higher paid employees with younger lower paid ones.

Good point. I have no pretensions that anyone would hire me after this job I have now. There are hordes of youngsters who can do 80% of what I do for 50% of the cost. I check my company mail every day expecting to see a RIF.

 

[jollystomper]

If my Megacorp offer me a buyout on those terms, I'd jump on it in a nanosecond.