BlackRock plans to cut 500 employees from its global workforce as the world’s biggest asset manager grapples with the fallout from last year’s market sell-off.
The job cuts at the nearly $8tn fund management group would be equivalent to a reduction of about 2.5 per cent of its total workforce of almost 20,000 people, about a third of whom are in the US.
The headcount reductions were announced in an internal memo from chief executive Larry Fink and president Rob Kapito, according to people familiar with it.
BlackRock declined to comment. The job cuts were first reported by Business Insider.
The move reflects the period of reckoning that 2023 could represent for many global asset managers, which are being forced to cut costs and make hard decisions about where to invest for growth. Some financial services sector companies, including Goldman Sachs, are already embarking on cost-cutting drives and plans to lay off staff.
Headcount at BlackRock has risen significantly since the start of the coronavirus pandemic. It had 19,990 employees as of September 30, according to its most recent 10-Q filing with the US Securities and Exchange Commission. That represents an 8.2 per cent increase over the first nine months of 2022 and a 23 per cent jump in headcount since the end of 2019.
BlackRock said in October it would pause discretionary hiring when it reported a drop in profits and assets under management in its fiscal third quarter.
It had $7.96tn under management in the three months to the end of September, its most recent quarter, a fall of 16 per cent from a year earlier. However, it reported net inflows of $17bn for that quarter.
The S&P 500 index of blue-chip US stocks fell 19.4 in 2022, while bond markets also turned negative, challenging fund managers seeking to eke out returns in volatile conditions.
BlackRock’s share price dropped 22.6 per cent last year. A 0.9 per cent decline in mid-afternoon trading on Wednesday trimmed its gains in 2023 to 5.9 per cent.