Fidelity Investments to offer buyouts for older employees

A sign marks a Fidelity Investments office in Boston

BOSTON (Reuters) – Fidelity Investments plans to offer voluntary buyouts to employees who are 55 years or older, and who have worked for the Boston-based fund firm at least 10 years, a company executive said on Monday.

The buyout offers came as Fidelity, known for its actively managed mutual funds, faces strong competition from low-cost index funds and other products.

The executive, speaking on condition of anonymity because the news has not been fully announced internally, said the offers will include extended healthcare coverage and what the executive described as “generous” financial packages based on the worker’s years of service and role.

Closely held Fidelity has about 45,000 employees, a number that has held steady in recent years, this person said. The buyout packages appear to be the first time Fidelity has made such a broad offer, the executive said.

With offices around the United States, it is not unusual for Fidelity to lay off or add staff. For instance it recently described plans to lay off 100 employees who work near Dallas, while adding 135 new workers in Albuquerque, New Mexico, according to local news reports.

Fidelity on Feb. 16 reported its financial services operating profit rose nearly 20 percent to $3.5 billion for 2016, despite big withdrawals by investors from the company’s well-known actively managed funds.

(Reporting by Ross Kerber; Editing by Jonathan Oatis)