BlackRock plans to lay off 600 employees, about 3% of the global workforce

a job

By Charlie Gasparino, Fox Business

BlackRock, the world’s largest money manager, plans to announce layoffs in the coming days for about 3 percent of its global workforce, Fox Business has learned.

Job cuts of about 600 employees, which have not yet been reported, are described internally as routine, according to a source familiar with the matter. The source added that last year, BlackRock conducted a similar round of layoffs that were measured on employee performance metrics.

BlackRock shares rebounded in 2023, rising 6 percent after falling 21 percent in 2022. New client money exploded into BlackRock’s robust ETF business last year with $187 billion in flows into products that track a basket of securities. Finance and trades like stocks in major companies. Exchanges.

On Wednesday, BlackRock expects SEC approval for its new “spot” Bitcoin ETF — the first time a cryptocurrency investment product that tracks the daily price of the world’s most popular digital currency has been approved by securities regulators. To trade on a trading platform. General stock market. Other asset managers also expect approval for their ETFs.

A BlackRock spokesman did not comment on the layoffs. BlackRock is scheduled to report fourth-quarter earnings on Friday.

One possible motivation for the layoffs is that BlackRock, after years of explosive growth in assets under management, or assets under management, is settling into a more mature phase of its business. The analyst consensus expects fourth-quarter earnings to decline 2.46 percent year over year to $8.71 per share.

BlackRock ended the third quarter of 2023 with $9 trillion in assets under management although the company has seen significant declines in assets since reaching a peak of more than $10 trillion in 2022 amid volatile financial markets. The decline in assets also came as BlackRock became a political blocker due to its embrace of environmental and social governance, or ESG, investing, which directs investment funds to public companies in the sustainable energy space, or those taking steps to reduce their carbon footprint and advocating for corporate governance measures such as… Diversity on boards of directors.

Fox Business has learned that the company has reduced focus on its environmental, social and governance work in the US amid the controversy. U.S. portfolio managers are no longer required to consider ESG metrics when not using ESG funds. In 2023, several so-called green investment funds saw declines in assets amid poor performance as investments in sustainable energy products failed to deliver significant returns.

Company founder and CEO Larry Fink told Fox Business that he will no longer use the ESG letter mention because of the controversy it has sparked in political circles.

While top Republicans, including several GOP presidential candidates, have attacked BlackRock and ESG, those who manage pension funds in red states have grabbed about $6 billion of BlackRock’s money as a form of protest.

The GOP front-runner, former President Donald Trump, has been noticeably calm after the BlackRock bashing. One reason may be that BlackRock once managed Trump’s billion-dollar fortune. In 2017, Trump said of Fink: “Larry has done a great job for me. He managed a lot of my money. I have to tell you, it has gotten me great returns.

People close to BlackRock told Fox Business that savings from job cuts will be used to expand into growth businesses such as investing in technology and investing in so-called alternative products rather than stocks and bonds.

Meanwhile, ESG remains big business with BlackRock’s foreign clients, including large sovereign wealth funds in Europe and the Middle East. Speaking at a recent event sponsored by news outlet Semaphore, Mark Weidman, head of client business at BlackRock, described ESG as a “demand from clients,” as BlackRock manages about $1 trillion in pure-play sustainable assets.