BlackRock is set to cull 500 employees from its global headcount following a brutal year that has severely dented revenue and profit at the world’s largest asset manager.
BlackRock’s chief executive Larry Fink and president Rob Kapito told staff about the cuts in a memo on 11 January.
“The uncertainty around us makes it more important than ever that we stay ahead of changes in the market and focus on delivering for our clients,” Fink and Kapito said in the memo, first reported by Business Insider.
The dismissals, which amounts to about 2.5% of its total staff, adds to the thousands of jobs being cut in financial services, including the most recent banker dismissals at the world’s largest lenders including Goldman Sachs, Citigroup and Morgan Stanley.
A BlackRock spokesperson told fellow Dow Jones publication MarketWatch the job cuts were being made in the face of an “unprecedented market environment”.
Amid tumbling markets, BlackRock’s shares dropped around 23% during 2022, driven down by several factors including a drop in investment advisory, administration fees and securities lending revenue (base fees), and a 65% decrease in the performance fees.
Third-quarter results from the asset manager, published in October, showed assets under management had dropped to $8tn, down from $8.5tn in June.
Meanwhile, revenue fell 15% on the previous year to $4.3bn, while profit dropped 16% to $1.4bn.
The New York-headquartered firm, which is expected to release its fourth-quarter results on 13 January, hasn’t embarked on such a brutal staff-cutting exercise since 2019, Bloomberg reported.
“Our breadth and resilience, enable us to play offence when others are pulling back,” the note from Fink and Kapito said.
BlackRock did not immediately respond to Krugman Insights’ request for comment.
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