GettyImages 632168302
BlackRock CEO Larry Fink.
- BlackRock is cutting 500 staff globally in an effort to streamline its business, according to a memo obtained by Business Insider.
- The world's largest asset manager, which employs about 15,000 people worldwide, will redeploy the savings into four areas: investments, which includes retirement, illiquid alternatives and exchange-traded funds; technology; portfolio construction; and international distribution.
- The layoffs come a day after State Street started senior-level cuts and after BlackRock announced a major promotion, signaling an 'heir apparent' to chief executive officer Larry Fink.
BlackRock is laying off about 500 employees globally in what appears to be its biggest round of cuts yet, the New York-based firm said in a Thursday memo to employees obtained by Business Insider.
The world's largest asset manager will cut about 3% of its 15,000-person workforce globally, touching every region, seniority level, and business line. Despite the reductions, BlackRock's headcount is still 4% higher than a year ago, the memo said. The firm has been increasing its headcount between 6% and 7% annually.
"The changes we are making now will help us continue to invest in our most important strategic growth opportunities for the future," Rob Kapito, the firm's president, wrote in the memo. "Some businesses will be more impacted than others as we reallocate resources to our most critical growth opportunities."
See more: Morgan Stanley is cutting dozens of jobs across sales and trading right before year-end bonuses
The $6.4 trillion asset manager last reduced staff significantly in 2016, trimming about 400 jobs - then a record cut. Both rounds of reductions were positioned as streamlining the business.
The latest cycle sees BlackRock using the staff savings to invest in four areas: investments, including retirement, illiquid alternatives, exchange-traded-funds, and factors; technology; portfolio construction; and international distribution, according to the memo.
On Wednesday, BlackRock signaled a focus on many of the same areas with a memo promoting Mark Wiedman, who led the firm's hot ETF platform, to head of international and of corporate strategy.
BlackRock's cuts come a day after $2.8 trillion asset manager State Street began laying off about 15% of senior management.
The firms are not alone in plans to cut employees this quarter, Business Insider reported in November.
"Many firms are already planning for reductions during the first quarter of 2019 through both attrition and terminations," said Francine McKenzie, managing director at consultancy Johnson Associates.
- Read more:
- There's one clear winner in the asset-management business in 2018, and it shows how the industry's changing
- BlackRock and Microsoft want to make retirement investing as easy as ordering an Uber
- BlackRock now has a higher percentage of technologists than JPMorgan, and it says a lot about the future of the money-management industry
- BlackRock is buying a stake in a financial technology company to reach more than 90,000 money-managers