Investment management firm BlackRock (BLK) announced that it will lay off 500 employees - 2.5% of its global workforce - after it faced financial difficulties due to the 2022 stock and bond market downturn. Company CEO Larry Fink and President Rob Kapito noted in a memo viewed by Bloomberg:
The uncertainty that surrounds us makes it more important than ever that we stay ahead of changes in the marketplace and focus on achieving results for our customers. Our breadth and endurance allow us to play offense when others pull back.
First round of cuts
In 2022,BlackRock shares plunged 23%, this was due in large part to the global economic crisis, where rising inflation and rising interest rates have rattled asset managers and markets.
The firm - with $7.96 trillion in assets under management - did not specify which departments of the company will be most affected by the new, employee reduction plan. Fink and Kapito said they would work to "manage expenses prudently" and invest profitably.
Executives stated that they are confident in the company's ability to raise money from new customers. Flows into its long-term investment funds increased by $250 billion during the first nine months of last year, and analysts surveyed by Bloomberg predict an additional $116 billion in inflows in the fourth quarter of the year.
Not since 2019 has the company carried out a wave of mass layoffs. In the document, the continuous growth of 22% in the number of employees over three years was highlighted. It is worth noting that in 2022 alone, the company experienced an 8% expansion and workforce growth. After several internal conversations, the managers sent a message to the employees informing them of the layoffs.
