No Fidelity to Hub: Up to 1,500 employees to exit

Boston Herald ^ | 1/6/2006 | Scott Van Voorhis and Jay Fitzgerald

[saveliberty]

No Fidelity to Hub: Up to 1,500 employees to exit
By Scott Van Voorhis and Jay Fitzgerald
Friday, January 6, 2006 - Updated: 12:14 AM EST

The Hub’s battered job base buckled yesterday, with Fidelity Investments confirming plans to export jobs to Rhode Island in a move that could pull as many as 1,500 workers out of downtown Boston.
      The move by one of Boston’s oldest and largest employers, first reported in yesterday’s Herald, will eventually send 800 workers to a new building in the works on Fidelity’s growing, Smithfield, R.I., campus. In the meantime, 400 of those workers will be sent packing this June to temporary offices in Providence until the new Smithfield offices are ready.
      In a sign that underscores the significance of its decision, Fidelity’s key Personal Investments division will move its headquarters, now in a Financial District high-rise, to Smithfield, an internal Fidelity memo obtained by the Herald said.
      Among the Fidelity units slated to move to Providence in June, according to the memo, are Brokerage Products & Asset Management, Compliance, Distribution, Marketing and Retirement Services. Some workers in Fidelity Brokerage Co.’s support services, such as Finance, Human Resources, Risk, Learning & Communications and Meetings & Events, are also shipping out of the Hub.
      News of Fidelity’s big job pullout prompted a phone conference yesterday between Mayor Thomas M. Menino’s office and Fidelity. “We had some discussions,” Menino spokesman Seth Gitell said.
      Some were less restrained in lamenting the impact of Fidelity’s decision, calling it a troubling sign for a city and state economy beset with sky-high housing costs and regulatory red tape. Fidelity’s job shift comes after a recent announcement by longtime Hub tech powerhouse Teradyne that it will be leaving. Gillette, bought by Procter & Gamble earlier this year, is also shedding Boston jobs.
      “This is what we have been afraid of — this is the other shoe dropping that we have been waiting for,” said David Begelfer, head of a trade group that represents Boston area real estate executives. “It should be a wake-up call.”
      Along with shifting jobs to Rhode Island, Fidelity will move another 400 to 700 employees to other regional offices, including a corporate campus it has steadily expanded in Merrimack, N.H.
      The prospect of leaving downtown Boston for suburban Rhode Island and New Hampshire has sparked concern among some Fidelity employees not eager to be uprooted. The company memo, sent by Jeff Carney, president of Fidelity Personal Investments, alludes to such concerns. Fidelity plans to brief employees — and sell them on Rhode Island — in an upcoming meeting.
       “I realize that many of our Boston-based associates will have concerns about moving to a new area or facing a longer commute,” Carney wrote.
      Crowley said the moves are part of Fidelity’s attempt to create “geographic diversity,” and assures multiple back-up systems. She acknowledged that recently passed tax breaks in Rhode Island partly influenced Fidelity’s decisions.
      Though it’s reducing its current 12,795 Massachusetts work force, Crowley said it expects to remain a strong headquarters presence in the state in coming years.
      Still, Carney wasn’t shy about singing the Ocean State’s praises. Rhode Island “offers an attractive business climate and an excellent quality of life,” he wrote.
 

[saveliberty]

The state's a mess, that's for sure

[saveliberty]

FYI, Boston used to be a center for financial services but the high taxes and expensive real estate have given companies something to think about.

[billybudd]

Eh, just higher rents than R.I. It's pretty simple.

[oh8eleven]

She acknowledged that recently passed tax breaks in Rhode Island partly influenced Fidelity’s decisions.
Follow the money. Here in NY the local papers run a story about tax increases in column A, and another story in Column B wondering why people are leaving the state in droves. Duh.

[saveliberty]

Smithfield is pretty cheap. And there is less competition for skilled workers.

[saveliberty]

Exactly

[SJSAMPLE]

When you relocate your business to another state, it's now called "exporting jobs"? Pathetic.

[saveliberty]

Right, because no changes in behavior are supposed to happen. Ever. Especially when money is involved.

[mdmathis6]

Hey it could be worse...they could have exported the jobs to less expensive accountants in India or China!

[saveliberty]

Financial services tried the India experiment. Some of them had to bring the jobs back, because customers complained of the language barrier (we speak English differently) and the cultural barrier (inability to understand that the customer is right).

On the other hand, tech jobs can be successful. For example, the night crew for Oracle is in India and they are really good.

[proxy_user]

Not only that, you need a Series 7 license to perform many of these functions. I don't know if it's possible for Indian nationals living in India to get one.

[saveliberty]

If they are acting as fiduciaries, yes, that would be an issue. But there are plenty of service jobs that aren't.

Net net, they tried it and some had to roll it back.

[spintreebob]

What's the difference between a company moving from central city to suburbs of that city?
Or to an adjacent state?
Or to a distant state?
Or to an adjacent country?
Or to a distant country?

Does an employer have a "property right" in the jobs it creates?
Does an employee have a "property right" in the job he has?
Does a government have the "power" to regulate when and where a job can move in or out of its jurisdiction?

[ASA.Ranger]

***"this is the other shoe dropping that we have been waiting for,”***

Massachusetts lost it’s once viable shoe industry for the same reasons.

Shoe manufacturers left Massachusetts starting after the First World War because of, they said, higher production costs here than elsewhere in the United States or overseas, such as wages, union demands, and government regulations. Workers in Asia oftentimes earn less than a dollar per hour. (Massachusetts News By John Pike).

[CPOSharky]

When you relocate your business to another state, it's now called "exporting jobs"? Pathetic.

To Kennedy, Kerry, and the other Boston-centric stuck-ups, there is Massachuchets and then the rest of the world. So to them, it is 'exporting jobs.'

Look for a rise in taxes to make up for the loss of revenue. /s

[SJSAMPLE]

I PRAY that they raise taxes in Taxachusetts to make up for this. Might wake those idiots up.

[saneright]

You know your city and state taxes are out of control when the state of Rhode Island is considered a tax shelter.

[2banana]

And the housing bubble in Boston takes another prick...

Boston is going to splat very soon...

[saveliberty]

Actually RI does cut tax deals to businesses that settle there.

[saveliberty]

I agree with you