BlackRock, the global financial giant renowned for its investment management prowess, is set to unveil layoffs affecting approximately 3 percent of its worldwide workforce, Fox Business has learned.
These impending job cuts, totaling around 600 employees, have not been officially disclosed but are internally depicted as routine, according to a source familiar with the matter. Similar layoffs based on performance metrics were executed by BlackRock last year, the source revealed.
Despite a tumultuous 2022 that witnessed a 21 percent dip in its shares, BlackRock witnessed a remarkable 6 percent surge in 2023. The firm experienced a significant influx of new capital, amounting to $187 billion, into its robust Exchange Traded Fund (ETF) segment. These products, mirroring a basket of securities and trading akin to stocks on major exchanges, saw substantial traction among investors.
Anticipation surrounds BlackRock's awaited approval from the Securities and Exchange Commission (SEC) for its novel Bitcoin "spot" ETF. If approved, this marks the groundbreaking debut of a crypto investment product tracking the daily price of the world's leading digital coin within public stock markets. Several other asset managers are also poised for similar approvals for their respective ETFs.
While a BlackRock spokesperson refrained from commenting on the impending layoffs, the firm is scheduled to disclose its fourth-quarter earnings this Friday.
The maturation of BlackRock's business, evident after years of exuberant growth in assets under management (AUM), potentially serves as a catalyst behind these layoffs. Analysts' consensus forecasts for the fourth quarter indicate a projected 2.46 percent year-over-year earnings decline to #$8.71 per share.
Despite culminating the third quarter of 2023 with $9 trillion in AUM, BlackRock encountered significant asset contractions since its peak of over $10 trillion in 2022 amidst erratic financial markets. This downturn coincided with the firm's becoming a focal point in the realm of Environmental Social Governance (ESG) investing. The approach directs investment funds towards companies engaged in sustainable energy initiatives or those advocating corporate governance reforms, including boardroom diversity, ultimately influencing BlackRock's trajectory.
The impending layoffs at BlackRock signify a pivotal phase in the firm's trajectory, aligning with shifts in market dynamics and regulatory landscapes while maintaining a steadfast focus on evolving investment avenues.
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