BlackRock lays off 600 employees, citing evolving technological landscape in the industry

BlackRock, the world’s largest money management firm, is set to sack around 600 employees as a strategy to reallocate resources in response to the evolving technological landscape in the finance sector.

The speed at which the industry is changing is unprecedented since the foundation of BlackRock, according to an internal memo by CEO Larry Fink and President Rob Kapito. As they set sights on 2024, they emphasized that divisions throughout the firm are formulating plans to redistribute resources, prompted by the transformative potential of new technologies.

In a memo, BlackRock CEO Larry Fink and President Rob Kapito noted that exchange-traded funds (ETFs), which can be managed with automation, are becoming the popular choice for implementing both index and active investment strategies, thus necessitating fewer teams of analysts.

Despite plans to lay off 600 staff, the New York firm anticipates expanding its workforce by the end of the year, as noted in the memo, in order to bolster key growth areas. The asset management sector has had a challenging period due to a downturn in the stock and bond markets in 2022 and high interest rates in 2023.

BlackRock saw a $13 billion withdrawal from long-term investment funds in Q3 2023 and total assets under management fell by 3.2% to $9.1 trillion from $9.4 trillion in the previous quarter.

Fink stated that for the first time in nearly 20 years, clients are earning real returns in cash, hence they can afford to wait for more policy and market certainty before taking on additional risk. In addition to the announced layoffs, BlackRock had previously cut around 2.5% of its workforce, equivalent to 500 employees, in January of that year.