BLACKROCK will dismiss about 600 employees, or roughly 3 per cent of its global workforce, as it seeks to reallocate resources amid rapid changes in asset management.

“We see our industry changing faster than at any time since the founding of BlackRock,” chief executive officer Larry Fink and president Rob Kapito wrote on Tuesday (Jan 9) in a memo to staff.

The executives said that exchange-traded funds (ETFs) have become the preferred vehicle for both index- and active-investment strategies, and that the firm is growing across the globe – including in Europe and Asia.

“And, perhaps most profound, new technologies are poised to transform our industry – and 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 the cuts, as it expands certain parts of the business.

The asset-management industry has been buffeted over the past two years, first by declines in stock and bond markets in 2022 and then by investors who grew skittish over higher interest rates.

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BlackRock is among big money managers, including Wellington Management and T Rowe Price Group, that have recently cut jobs and redirected budgets in response.

BlackRock increasingly seeks to position itself as a one-stop shop for investors offering equity, bond and money-market funds and strategies for private assets, as well as providing tech, data, analytics and financial markets advice to clients.

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

Prior cuts

BlackRock said last January that it would dismiss about 2.5 per cent or 500 employees, and then announced further cuts in June, amounting to less than 1 per cent of staff. The firm, which had US$9.1 trillion of client assets as at Sep 30, reports fourth quarter earnings on Friday.

Shares of BlackRock dropped 1.8 per cent this year on Monday, after rising 15 per cent in 2023. Much of that gain came later in the year after investors began to wager that the Federal Reserve had stopped increasing interest rates and would begin cutting this year.

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

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