BlackRock Eliminates 600 Jobs, Or 3% Of Staff: 'Our Industry's Changing Faster Than Ever,' CEO Larry Fink Says

BlackRock Inc. (NYSE: BLK announced plans to eliminate approximately 600 jobs, constituting about 3% of its global workforce.

This move, per Bloomberg, reflects the evolving asset management landscape and a realigning of its workforce with emerging trends.

CEO Larry Fink and President Rob Kapito emphasized in a memo that the asset management industry is undergoing its fastest transformation since BlackRock’s inception in 1988.

"We see our industry changing faster than at any time since the founding of BlackRock," they wrote in a joint statement.

For example, BlackRock is experiencing a significant pivot towards Exchange-Traded Funds (ETFs) for both index- and active-investment strategies.

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In October, the company reported its first quarterly outflows since the onset of the pandemic in 2020. Clients withdrew $13 billion from long-term investment funds, primarily those that were managed actively.

BlackRock also experienced an influx of over $186 billion in new ETF assets and $16 billion in index mutual fund assets last year.

Reshaping Asset Management

In a November report, the Blackrock Investment Institute underscored the significant influence of emerging technologies, especially artificial intelligence (AI), which is set to transform not just the financial sector but every aspect of the economy.

BlackRock analysts compared the current technological race, especially in AI, to the industrial and informational revolutions of the past. This technological pivot is seen as a critical factor in future investment trends.

BlackRock also expects five forces to shape investing in the coming years: digital disruption and AI, geopolitical fragmentation, demographic divergence, the future of finance, and the transition to a low-carbon economy.

The firm is optimistic about the growth of the full AI ecosystem, too. Industry leaders are likely to be those who can secure top talent, invest in computational power, and harness data effectively.

Price Action: BlackRock shares fell 0.6% on the announcement day, with a 1.4% decline year-to-date as of Jan. 9, 2023. The stock is trading at $793.26 per share at the time of writing. That’s down about 0.57%.

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