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BlackRock's investment management company is set to lay off around three percent of its workforce. This will affect employees working in its offices around the world.
BlackRock said on Tuesday, Jan. 9, that it is planning to terminate about 600 jobs now, but it is also expecting to add more new workers by the end of this year. The company has a headcount of about 19,800 as of December 2022, the period it last updated the number of its staff.
Cause of the Job Cuts, Business Conditions
According to Reuters, the world's largest asset manager decided to reduce its workforce due to the changing business environment. BlackRock said its shares are up by around five percent in the last 12 months, but in the third quarter of 2023, its assets only hit $9.1 trillion, down from the second quarter's total of $9.4 trillion.
The company is expected to release its fourth-quarter results this week. It was also noted that its shares dipped by 0.5% in afternoon trading on Jan. 9. BlackRock is sharing these details to show changing conditions in the market, which led to the job cuts. The company will terminate workers from various units instead of focusing on just one division.
Technological Changes in the Market
The executives of BlackRock said that new technologies are set to transform our industry, and while this may be a good thing for most companies, it may also have adverse effects like workforce reduction. In fact, before this layoff announcement, BlackRock laid off around 2.5% of its workforce last year.
"We see our industry changing faster than at any time since the founding of BlackRock," CNN Business quoted BlackRock's chief executive officer, Larry Fink, and president, Rob Kapito, as saying in an internal memo for the layoff. "As we prepare for 2024 and this very exciting but distinctly different landscape, businesses across the firm have developed plans to reallocate resources."
Photo by: BlackRock Website
