BlackRock Inc has decided to lay off about 3 percent of its global work force which came to be its largest cut since 2016.
About 500 employees will be leaving from world’s largest asset manager, as an internal memo viewed by the Reuters, which shows dismissal of about 500 staff in coming weeks, but for most affected business by these dismissals, nothing was specified in the memo.
Markets disturbed by instability and investors interested in low fee funds draw the assets manager under pressure and to cut the costs, industry has been deploying advanced technologies across its businesses.
Quant fund manager Capital Management, after a dismal performance in 2018, is reducing the headcounts. State Street Corp., the giant asset manager and custody bank, has already started lay off 15 percent of its senior management posts from Wednesday.
As of September 2018, BlackRock was employing about 14,900 staff globally who at BlackRock oversees $6.4 trillion in assets under company’s management.
After the layoffs of 3 percent, the head count at BlackRock will remain 4 percent higher than a year ago. Jobs cuts cover all of its regions and not focused in any one unit or geographic region, according to people familiar with the plans.
The job cut announcement came very next day when BlackRock unveiled a major change in role of its executives, as Mark Wiedman, the head of its thrusting exchange-traded funds (ETF) business was promoted by CEO Larry Fink to a new global strategy assignment. Fink also hinted more changes in executive’s roles.
BlackRock saw long-term net inflows at their lowest point since 2016, when, in October, it reported third-quarter earnings. Fink at that time said that results did not came as per expectations and firms is not particularly happy with the results, but for poorer results he counted the geopolitical disturbance as compelling factor causing investors not to take any risks.