BlackRock (BLK) plans to cut about 400 jobs in what might be the biggest round of layoffs to date at the world's largest money manager, according to people with knowledge of the matter.
The reductions, equal to about 3% of the firm's 13,000 employees, will be announced in the coming weeks, said the people, who asked not to be identified because they weren't authorized to speak. Despite the cuts, the firm will continue to invest and hire in key areas, and expects to end the year with a higher headcount, according to one person.
Farrell Denby, a company spokesman, declined to comment.
CEO Laurence D. Fink said in January that the market swings at the start of this year might put pressure on companies to eliminate jobs. Revenue at BlackRock is forecast to grow just 1% in the first quarter and decline in the second quarter, according to 11 analysts surveyed by Bloomberg. The only other time BlackRock cut jobs on a similar scale was in 2013 after a reorganization, although it ended that year with a higher headcount.
BlackRock is following a number of money managers in letting people go as stock market volatility erodes fees earned for overseeing client assets. Global stocks, as measured by the MSCI ACWI, fell almost 12% this year through Feb. 11, before paring losses to 1.2% through Tuesday.
The company's earnings last quarter fell short of analysts' estimates because of rising expenses, including compensation costs. Analysts expect net income in the first quarter to fall 12% from a year earlier, to $727 million, according to nine estimates compiled by Bloomberg.
Mr. Fink said during a conference call discussing fourth-quarter earnings that BlackRock has the mindset to make investments during volatile periods like this year while others run from them. The firm has said previously it aims to invest in areas such as infrastructure and alternatives, and wants to boost the sale of products to individual investors.
BlackRock's shares declined 6% in the past year through Tuesday, better than the 16% drop in the 19-member Standard & Poor's index of asset managers and custody banks.
The firm eliminated about 300 jobs in the previous round of job cuts three years ago. That reduction was part of a reorganization that included the shakeup of its investment units in 2012, and was focused on improving performance. Since then, headcount has increased by about 2,500.
The current cuts are more broad-based and will happen across regions and businesses, said one of the people. They're aimed at streamlining the business and reallocating resources to areas with the most growth opportunities, this person said.
BlackRock's decision follows similar moves by State Street Corp. (STT), which announced in October it would be firing 600 employees globally to accelerate cost reductions. Franklin Resources cut about 1% of its global staff in February after assets declined.
BlackRock reorganized its senior ranks earlier this year, which involved combining its fundamental and active equity groups and setting up a new real assets group. In 2014, BlackRock expanded its top leadership, resulting in new roles for at least 10 senior executives.