BlackRock Inc. BLK intends to trim its workforce by roughly 1% as part of a strategic restructuring. This was reported by Bloomberg on Wednesday.
Rationale Behind BLK’s Move
BlackRock’s decision follows investments of more than $25 billion last year in acquisitions aimed at broadening its expertise in private-market assets and data.
The cuts are part of BlackRock’s efforts to realign its resources with its growth strategy. The company expects to accelerate strategic investments in acquisitions in 2025 and build a dynamic organization to serve clients in the long run.
These layoffs will affect nearly 200 BlackRock’s employees. Despite the layoffs, the company’s overall headcount is estimated to increase by 2,000 in 2025 in light of recent acquisitions of Global Infrastructure Partners (GIP), private credit firm HPS Investment Partners and data firm Preqin.
The $12.5 billion acquisition of GIP was completed on Oct. 1, 2024, while the approximately $12 billion deal for HPS Investment Partners is anticipated to be closed in mid-2025. Further, the $3.2 billion Preqin transaction was expected to close before 2024 -end, but it is still pending.
These opportunistic expansions are part of BLK’s inorganic growth strategy to enhance its footprint domestically as well as globally. In addition to the abovementioned deals, the company acquired the remaining 75% stake in SpiderRock in May 2024 to strengthen its separately managed accounts offerings. In 2023, the company acquired London-based Kreos Capital.
BlackRock’s Zacks Rank & Price Performance
Over the past six months, shares of BlackRock have gained 19.5% compared with the industry’s 23.8% growth.
Image Source: Zacks Investment Research
Currently, BLK carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Layoffs by Other Finance Firms
Ally Financial ALLY announced the layoff of less than 5% of its employees as part of its business restructuring plan. The company will be exiting the mortgage origination business and is seeking “strategic alternatives” for its credit card business.
The planned layoffs are not specific to any location or operation. ALLY spokesperson Peter Gilchrist revealed these details.
Similarly, last month, Bloomberg reported that UBS Group AG UBS is planning to cut jobs in France amid the country's sluggish economic growth and ongoing efforts to integrate Credit Suisse (“CS”) following its acquisition in June 2023.
France’s economy is facing significant challenges, with the country’s business confidence dropping sharply in December. According to data from France’s national statistics agency, the economy is expected to grow only 0.2% per quarter during the first half of 2025. While the weak economic condition of France remains a key factor behind UBS’ job cuts, the ongoing integration of CS also plays an important role.
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