Jakarta, 15 January 2024 – BlackRock Inc. will lay off about 600 employees, or about 3% of its global workforce, to reallocate resources amid rapid changes in the asset management business.

As reported by Bloomberg, BlackRock CEO and President Larry Fink and Robert S. Kapito on Tuesday (2/1/2024) in a memo to staff, stated, “We see our industry changing faster than at any time since the founding of BlackRock.”

Executives say ETFs (Exchange-traded funds) have become the instrument of choice for index and active investment strategies, with companies expanding across the world, including in Europe and Asia.

“And, perhaps most profoundly, new technologies are poised to transform our industry, indeed every other industry,” Fink and Kapito said in the memo.

The world’s largest asset manager said it still expects to have a larger staff by the end of the year, even with cuts, as it expands certain parts of its business. The asset management industry has been rocked over the past two years, first by the stock and bond market declines in 2022 and then by investors becoming jittery over higher interest rates.

BlackRock is among large money managers, including Wellington Management and T. Rowe Price Group Inc., that have recently cut jobs and shifted budgets as well. BlackRock is increasingly seeking to position itself as a ‘one-stop shop’ for investors offering money market, bond and equity funds and strategies for private assets, as well as providing technology, data, analytics and financial markets advice to clients.

The company also aims to expand into the growing market for alternative investments, with a goal of doubling revenue from private markets in the next five years.

In previous cuts, BlackRock said in January 2023 it would lay off about 2.5% or 500 employees, then announced further cuts in June 2023 of less than 1% of the staff.

The company, which had client assets of US$ 9.1 trillion as of September 30, 2023, reported fourth-quarter profits on Friday (5/1/2024). BlackRock shares were down 1.8% this year through Monday (1/1/2024), after rising 15% in 2023. Most of those gains came back this year after investors began betting that the Federal Reserve had stopped raising interest rates and would started pruning this year.

In October 2023, BlackRock reported its first quarterly outflows since the start of the pandemic in 2020. BlackRock clients withdrew US$13 billion from long-term investment funds, including from actively managed products that typically carry higher fees than index strategies.

The company said it took in more than $186 billion in new ETF assets and $16 billion in index mutual fund assets last year.

The original article in Bahasa Indonesia can be accessed here