BlackRock rose 0.4 percent in New York trading Wednesday. The shares declined 7.3 percent in the past year, better than the 16 percent drop in the 19-member Standard & Poor’s index of asset managers and custody banks.
Broad-Based
The firm eliminated about 300 jobs, or less than 3 percent of its workforce, in the previous round of job cuts three years ago. That reduction was part of a reorganization that included the shakeup of its investment units in 2012, and was focused on improving performance. Since then, headcount has increased by about 2,500.
The current cuts are more broad-based and will happen across regions and businesses, said one of the people. They’re aimed at streamlining the business and reallocating resources to areas with the most growth opportunities, this person said.
BlackRock’s decision follows similar moves by State Street Corp., which announced in October it would be firing 600 employees globally to accelerate cost reductions. Franklin Resources Inc., the investment firm that manages the $50 billion Templeton Global Bond Fund, cut about 1 percent of its global staff in February after assets declined.
Reorganizing Ranks
Fink built BlackRock from a bond shop started in a one-room office to a $4.6 trillion global money manager with much of the growth fueled by acquisitions, including the 2009 purchase of Barclays Plc’s investment unit. The firm attracted $54 billion in net new money in the fourth quarter, helped by a broad lineup of offerings.
Fink and Kapito have led three reorganizations in the last four years. They have promoted younger executives to senior roles after a number of the firm’s co-founders left or retired from active positions.
The firm reorganized its senior ranks earlier this year, which involved combining its fundamental and active equity groups and setting up a new real assets group. In 2014, BlackRock expanded its top leadership, resulting in new roles for at least 10 senior executives.