BlackRock is the latest Wall Street firm feeling the heat of an ugly 2022 and a significantly slower pace of dealmaking heading into 2023. As a result the firm, like many Wall Street firms we have reported on over the last few months, is reducing its headcount.
The world’s largest asset manager is going to be reducing its workforce by about 500 jobs, CNN reported on Wednesday. The move comes following a “hiring spree” that the company undertook in recent years. It hasn’t made major layoffs since 2019, the report notes.
CEO Larry Fink and BlackRock president Rob Kapito said in a memo out this week: “This week, after meaningful headcount growth in recent years, we are making some changes to the size and shape of our workforce. As a result of these steps, about 500 (or less than 3%) of our colleagues will be leaving BlackRock as we reallocate resources to our most critical growth opportunities.”
The company grew its workforce by about 8% in 2022, Yahoo Finance noted. Headcount is still expected to remain 5% higher than one year ago, even after the layoffs, the same report says.
A spokesperson for the firm said the cuts were due to the “unprecedented market environment.” As we move past the holidays and well into the first month of 2023, job cuts and bonus cuts on Wall Street continue to pour in. Just yesterday, for example, we noted that Credit Suisse would be cutting up to 50% of its bonus pool.
Credit Suisse and Blackrock join a number of other Wall Street banks who laid off employees, cut bonuses or both after a torrid 2022. Goldman Sachs, for example, is set to lay off up to 4,000 employees, we noted last month. The bank was also “considering shrinking the bonus pool for its more than 3,000 investment bankers by at least 40 per cent this year”.
Also in mid-December, we wrote that Ernst and Young would be cutting its bonuses entirely. The company held an “all hands” meeting two weeks ago where it delivered the news to its employees. The company is in the midst of splitting its audit business from a tax and advisory business heading into 2023.