Fidelity Business Services India Pvt. Ltd, the business process offshore division or back office of one of the world’s largest asset management firms, has terminated the services of 30 employees at its investment management services group in Gurgaon in what it terms as a “business decision.”
Fidelity Business Services provides research and information technology assistance to the global operations of its parent, Fidelity International. Established in 2001, the firm employs around 7,000 people across three offices. The number of people employed in the investment management services group isn’t known.
“There was a review of the way in which analyst support was provided to global offices. The reorganization of the team has led to some roles being discontinued. However, Fidelity remains committed to India,” said a Fidelity spokesperson.
Fidelity International also runs an asset management company in India, Fidelity Fund Management Pvt. Ltd. This firm managed Rs9,509 crore of assets as on 31 January. It is also registered as a foreign institutional investor (FII) with stock market regulator Securities and Exchange Board of India.
Fallout of the US crisis?
A senior executive of a back office firm said it was only a matter of time before the US credit crisis that has affected large financial institutions in that country, has an impact on the so-called captive back-office units of those companies here. “One could see either a slowdown in the recruitment process at these captive units or the resources may be channelized into other operations,” this person added.
Wall Street investment banks, stung by debt losses, have cut tens of thousands of jobs, and even more significant cuts could come in the months ahead amid a bleaker earnings outlook.
US financial services firms eliminated more than 52,000 jobs in the second half of last year, a New York City official said in the second week of February, based on a quarterly study. Boston Consulting Group’s Achim Scvhwetlick estimates that firms may reduce headcount by 5-7%.
Goldman Sachs Group Inc., Lehman Brothers Holdings Inc., Merrill Lynch and Co. Inc., Bear Stearns Cos Inc. and Morgan Stanley have been cutting jobs since June, though pink slips have been on the rise since late January.
Many of these firms have outsourced some of their operations to India, employing thousands of people. Lehman has a back office in Mumbai, Lehman Brothers Financial Services (India) Pvt. Ltd; JPMorgan Chase and Co. has two such units in Mumbai and one in Bangalore; and Goldman Sachs has one in Bangalore. It is not known whether any of these firms has seen a slowdown in the recruitment process, although an executive at a staffing services firms thinks that unlikely.
“It (the crisis) hasn’t affected the hiring requirements” of the back offices of the “international finance companies we work with,” said Raman Hariharan, general manager, information technology enabled services practice, at Manpower Services India Pvt. Ltd.
Other recruiters also do not see a slowdown in hiring by the back offices of finance firms. Asim Handa, country manager at New Delhi-based Futuresteps, a subsidiary of recruiter Korn/Ferry International, said his firm has not seen any slowdown in the recruitment drive of his clients.
Futuresteps hires middle management executives for the captive business operations of some international financial services firms here.
Joseph A. Giannone of Reuters in New York contributed to this story.