Fidelity to Cut Jobs in Wake of Merger

Wasting no time after closing its $1.1-billion merger earlier this week, Fidelity National Financial Inc. said Wednesday that it plans to slash about 1,500 jobs nationwide--including as many as 100 in Southern California--over the next 12 months as it consolidates operations with former rival Chicago Title Corp.

The Irvine company, which is now the nation’s No. 1 title insurer, also said it will move quickly to use its larger size and financial resources to launch new products, such as homeowner’s insurance, and to accelerate efforts to move its business to the Internet.

One new Web site, for a fee, will provide lenders, real estate agents and consumers access to public records nationwide, including mortgage and tax lien information about most U.S. homes.

“We’ve always had the entrepreneurship to do this. Now we have the muscle,” said Fidelity Chairman William P. Foley II, whose aggressive deal-making over the past two decades has taken the company from No. 48 to No. 1.

The Chicago Title deal, which closed Monday, gives Fidelity 1,000 offices nationwide and a 30% share of all title insurance policies, which are typically purchased in every real estate transaction.

The purchase also triples Fidelity’s investment portfolio to nearly $2 billion, providing an extra $100 million a year in returns. The money will not only fund Fidelity’s new ideas, but will help Fidelity survive the current real estate market, which has slowed in response to rising interest rates.

Detailing its layoff plans for the first time, Fidelity said it expects to slash about 150 jobs this week and 80 more by the end of the month. As many as 1,500 will be cut within 12 months, mostly at the former Chicago headquarters, but also in some regional administrative offices nationwide.

About 40 jobs at a former Chicago Title facility in Pasadena were eliminated earlier this week and an additional 50 are likely to be cut at Fidelity’s Irvine headquarters, Foley said.

The company’s Santa Barbara office, where most executives are based, is likely to add about 100 jobs in the restructuring.

The layoffs--which are higher than expected because of the slowing real estate market--are the linchpin to Fidelity’s 12-month goal of squeezing $75 million in expenses out of the combined company.

But one of Fidelity’s biggest challenges over the next year will be hanging on to Chicago Title’s customers and preserving the combined company’s 30% market share.

“Whenever you have a consolidation like this, there’s always fallout,” said Jim Maher, executive vice president of the American Land Title Assn., an industry trade group.

To reduce the fallout, Fidelity is leaving its branch office network largely untouched, even if that means Fidelity and Chicago Title agents compete in the same neighborhoods, officials said.

Fidelity National’s shares rose 25 cents to close at $16.75 Wednesday on the New York Stock Exchange.