Blackrock poised to cut 500 jobs as the world’s biggest money manager hit by downturn
Blackrock is planning to lay off 500 staff globally, according to reports, as the world’s largest asset manager continues to grapple with 2022’s market sell-off.
The planned redundancies, first reported by Reuters and Insider, represent a roughly 2.5 per cent reduction in Blackrock’s global workforce. They were communicated to employees in an internal memo from Chief Executive Larry Fink and President Rob Kapito, according to the reports.
Blackrock declined to comment on the reports.
News of the expected job cuts come after a difficult year for the world’s largest asset manager. In the nine months to September 30, Blackrock’s net income fell to $3.7bn from $4.6bn in the same period last year, while its assets under management as of September 30 stood at $8.0bn, down from $10.0m at the beginning of 2022. It will report its fourth quarter earnings tomorrow.
Asset managers more broadly have struggled to find returns in a recessionary environment.
According to Morningstar figures, the US Market Index lost 19 per cent last year – its biggest annual loss since 2008 – while the US Core Bond Index lost 13 per cent in 2022, the worst performance since 1999.
Other major financial services companies have also announced major cost cutting measures this week.
Goldman Sachs started laying off 3,200 staff members on Wednesday while Credit Suisse is reportedly considering halving its bonus pool.
Japanese investment bank Nomura also laid off 30 members of its London staff, after the global slump in dealmaking, Financial News reported yesterday.
A Nomura spokesperson said: “2022 saw a material deterioration in global investment banking fee pools and, as a result, we have had to reduce headcount in certain areas. These changes are designed to ensure we retain focus in our key areas of competitive advantage, whilst maintaining core capabilities to position the platform for sustainable profitability.”
According Refinitiv data, mergers and acquisitions worth $1.4tn were announced in the second half of 2022, down from $2.2tn in the first half of the year.