BlackRock, Inc. (NYSE:BLK), the world’s largest money manager will slash around 3 percent of its workforce or 300 employees following restructuring, according to an internal memo. The firm will also move some employees to other locations. Some will leave now and others over the next few weeks.
Rob Kapito, president of BlackRock, Inc. (NYSE:BLK) assured the employees that the company will hire more employees despite the layoffs, and towards the end of 2013; it will have more employees than at present. According to Kapito, with evolving business the mix of employees should also change.
“These moves will give high potential employees greater responsibility and additional career opportunities, and will make us a more agile organization better positioned to respond to changing client and market needs,” Kapito said in the memo.
Scrip’s of BlackRock surged approximately by 50 percent over the past three months. Investors have been aggressively investing in stocks and bonds funds of BlackRock, Inc. (NYSE:BLK), mainly in its iShares line of exchange traded funds helping the company to increase its profit margin to more than 40 percent.
The latest job cuts by the firm are part of restructuring, which began last year, to expand through acquisition of new clients rather than growing through large acquisitions. In 2009, BlackRock, Inc. (NYSE:BLK) acquired investment unit of London Bank Barclays and almost doubled its assets. However, according to Laurence Fink, Chief executive, the firm will no more make big acquisitions this year.
Last year BlackRock, Inc. (NYSE:BLK) established a new firm architecture to enhance the responsibility and accountability and leverage more out of the talented leaders. The firm employed 10,500 people at the end of 2012, increasing the number by more than 1500 people since the start of 2010.
For the fourth quarter, BlackRock, Inc. (NYSE:BLK) reported a net profit of 690 million or an EPS of $3.93. The earnings beat market estimates with a 24 percent increase in quarterly EPS. Dividend was also increased by 12 percent.
The trimming of the jobs will in no way affect the executive or operating-committee level employees, according to a BlackRock, Inc. (NYSE:BLK) spokesperson. Further, in an email, the spokes person mentioned that although the company is laying off some of its employees, it will continue to hire in vital areas and expects to increase the count of employees by the end of the year than it had in the starting.