BlackRock to Conduct Mass Layoffs: What's the State of its Finances?

BlackRock, a giant asset management firm, will soon lay off 3% of its employees.

According to *Katadata*, this percentage equates to 600 people, based on BlackRock's total workforce of 19,800 at the end of December 2022. A *Reuters* source within BlackRock stated that no single team will be the focus of the cuts.

This round of layoffs marks BlackRock's third. In January 2023, the company reduced its workforce by 500 employees. Further layoffs occurred in June, affecting approximately 190 people.

So, what is BlackRock's current financial condition?

According to its financial reports, BlackRock's revenue reached US$17.87 billion in 2022, or Rp278.21 trillion (assuming an exchange rate of Rp15,566 per US$). Net income reached US$5.39 billion, or Rp83.91 trillion.

Both figures are down from 2021, when revenue was US$19.37 billion (Rp301.57 trillion) and net income was US$6.25 billion (Rp97.34 trillion).

The decrease in revenue and profit is attributed to various factors. "Revenue was impacted by market headwinds and foreign exchange rates," BlackRock wrote in its report.

BlackRock's operating margin was 42.8% in 2022, down 400 basis points (bps) from 46.8% in 2021. Positively, BlackRock achieved 3% organic asset growth and positive organic base fee growth in 2022.

*Katadata* reported that the investment manager's stock rose approximately 5% during the last 12 months of 2023, lagging behind the S&P Index's 22% increase.

BlackRock's Chief Executive Officer (CEO), Larry Fink, hinted in October that the company was seeking acquisition targets to boost its growth trajectory.

The company ended the third quarter of 2023 with US$9.1 trillion in assets under management, down from US$9.4 trillion in the second quarter.

"For the first time in almost two decades, clients are benefiting from significant cash returns and may wait for more policy and market certainty before taking on risk again. This dynamic is weighing on the industry and BlackRock's third-quarter flows," Fink said in a statement, as quoted by *Reuters*.