BlackRock Trims Workforce By an Additional 600 Jobs

BlackRock Inc., the largest asset management firm globally, is set to lay off around 600 employees. This move, affecting approximately 3% of its workforce, is a part of BlackRock’s plan to reallocate resources to meet the rapidly changing landscape of asset management.

The firm recognizes the accelerated rate of change in its industry, with exchange-traded funds (ETFs) overshadowing other investment vehicles for both index and active strategies. BlackRock is also riding the wave of growth across regions, with particular expansion noted in Europe and Asia.

Technological advancements stand at the forefront of this transformation. While technology threatens to disrupt each industry, it provides companies like BlackRock an opportunity to adapt, evolve, and leverage these developments to stay ahead.

Despite the impending layoffs, BlackRock anticipates a net increase in its workforce by year-end. This expansion focuses on specific business areas, highlighting BlackRock’s strategic direction.

Over the past two years, the asset management industry has faced significant challenges, from market declines in 2022 to investor apprehensions over increasing interest rates. BlackRock, like other large-scale money managers such as Wellington Management and T. Rowe Price Group Inc., has responded by cutting jobs and reallocating budgets.

The firm’s strategic vision involves becoming the go-to solution for investors. This approach provides equity, bond, and money-market funds, along with private asset strategies. In tandem, BlackRock offers tech, data, analytics, and financial market advice to its clients. BlackRock is looking to tap into the booming alternative investments market, aiming to double its revenue from private markets over the next five years.

Last January, BlackRock announced job cuts of roughly 2.5%, or 500 employees, with additional cuts in June. Despite these layoffs, the firm reported having $9.1 trillion in client assets as of Sept. 30.

BlackRock’s shares have fallen by 1.8% so far this year after rising by 15% throughout 2023. This increase came primarily as investors anticipated that the Federal Reserve would halt increasing interest rates and potentially start triggering cuts this year. BlackRock also reported net outflows in the last quarter, marking its first since the pandemic began in 2020. However, the firm clocked in over $186 billion in new ETF assets and $16 billion in index mutual fund assets during 2023.