At a time of rapid changes in the asset management industry, BlackRock, the world's largest asset management company, is seeking to reallocate resources. On Tuesday (January 9th), the company plans to lay off 600 employees, accounting for 3% of the total number of employees.
BlackRock CEO Larry Fink and President Rob Kapito wrote in a staff memo on Tuesday that the company is adapting to a rapidly changing environment, with layoffs accompanied by some business expansion. Therefore, by the end of this year, it is expected that the total number of employees will continue to grow on top of the current approximately 20000.
"By the end of 2024, as we continue to increase personnel and build capacity to support key growth areas, we expect to have a larger workforce... In serving customers and managing resources, we need to be flexible and efficient. We must leverage technology and redeploy personnel and resources where customer demand is greatest and growth opportunities are most promising."
Currently, within this $9.1 trillion asset management company, the fastest-growing sectors include technology, exchange traded funds (ETFs), and the private market.
According to insiders, this year's layoffs are not concentrated in any specific business department or team. In addition, BlackRock will announce its fourth quarter results this Friday.
The pressure on the asset management industry
The entire asset management industry is facing pressure to maintain profit margins. The fund management companies that have announced layoffs and restructuring in recent months include Jiaxin Wealth Management, Jingshun, and Manulife.
Jeffrey analyst Daniel Fannon wrote in an industry report this week, "The asset management industry still has revenue issues, and its cost structure does not match the current growth prospects."
BlackRock also cut a similar number of positions in the same period last year, mainly due to the market turbulence in 2022 leading to a decrease in the size of assets under its management.
Fink has stated that he is seeking a "transformational deal" to expand BlackRock's coverage, help it develop the Aladdin technology platform, or increase its alternative investment products.