“We see our industry changing faster than at any time since the founding of BlackRock,” Chief Executive Officer Larry Fink and President Rob Kapito wrote Tuesday in a memo to staff.

The executives said that ETFs have become the preferred vehicle for both index- and active-investment strategies, and that the firm is growing across the globe — including in Europe and Asia.

“And, perhaps most profound, new technologies are poised to transform our industry – and every other industry,” Fink and Kapito said in the memo.

The world’s largest asset manager said it still expects to have a larger staff by the end of the year, even with the cuts, as it expands certain parts of the business.

The asset-management industry has been buffeted over the past two years, first by declines in stock and bond markets in 2022 and then by investors who grew skittish over higher interest rates. 

BlackRock is among big money managers, including Wellington Management and T. Rowe Price Group Inc., that have recently cut jobs and redirected budgets in response. 

BlackRock increasingly seeks to position itself as a one-stop shop for investors offering equity, bond and money-market funds and strategies for private assets, as well providing tech, data, analytics and financial markets advice to clients. 

The company also aims to expand into the growing market for alternative investments, with the goal of doubling revenue from private markets over the next five years. 

Prior Cuts

BlackRock said last January that it would dismiss about 2.5%, or 500 employees, and then announced further cuts in June, amounting to less than 1% of staff. The firm, which had $9.1 trillion of client assets as of Sept. 30, reports fourth-quarter earnings on Friday.

Shares of BlackRock dropped 1.8% this year through Monday, after rising 15% in 2023. Much of that gain came later in the year after investors began to wager that the Federal Reserve had stopped increasing interest rates and would begin cutting this year.

In October, BlackRock reported its first quarterly outflows since the onset of the pandemic in 2020. BlackRock clients pulled $13 billion from long-term investment funds, including from actively managed products that typically charge higher fees than index strategies. 

The firm said it took in more than $186 billion in new ETF assets and $16 billion in index mutual fund assets last year.