Blackrock announces plans to cut 500 jobs as financial firms come under increasing pressure
Blackrock is set to cut about three per cent of its 14,900 global workforce, or about 500 employees, as it restructures amid challenging industry conditions.
The world's biggest investment group is still profitable on a margin of more than 40 per cent, but suffered a drop in share price of 24 per cent last year and is looking to reshuffle its management as a result.
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It was a challenging year for the entire asset management sector, which saw the average US manager's share price drop by 26 per cent, as it comes under increasing pressure on fees with weakening investor sentiment.
Blackrock's president, Rob Kapito, released a memo following the redundancy announcement and insisted that the overall number of employees was still four per cent higher than a year ago, despite the cuts.
“After several years of meaningful headcount growth, we are making some changes this week to the size and shape of our workforce,” Kapito said in the memo, seen by Reuters.
“Blackrock is a growth company, and growth requires investment. The changes we are making now will help us continue to invest in our most important strategic growth opportunities for the future,” he added.
The cutting of staff has been seen across the industry since the turn of the year as financial firms endeavour to reduce costs.
Giant custody bank and asset manager, State Street, has trimmed its senior management by 15 per cent, according to Bloomberg.
AQR Capital Management and Banco Santander SA's Polish unit have both announced plans to cut jobs this year, with the latter saying there could be as many as 1,400 redundancies, or 11 per cent of its workforce.
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Elsewhere, investment bank Morgan Stanley elected to cut under-performers throughout fixed-income, equities and research divisions.