Fidelity’s net profits fell only 4% last year, and they may be weak again this year, despite cost-cutting measures and laying off 3,000 workers, Fidelity President Rodger Lawson warned employees in a recent memo. As a result, the company may scale back on year-end bonuses and merit pay for those in the middle and lower earnings brackets.

Income may be “somewhat lower,” Lawson wrote. Last year, Fidelity’s revenue fell 4% to $12.9 billion, and assets under management fell 22%.

“Recent events have shown businesses face many challenges as the recession lingers,” Fidelity spokeswoman Anne Crowley told The Boston Globe. “While Fidelity continues to do an excellent job, our industry and the economy in which we operate have undergone many changes that have impacted companies across all industries and will continue to do so for the foreseeable future.”

The merit raises typically average 15% of employees’ pay, and by some estimates, the cuts could save Fidelity tens of millions of dollars this year.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.