BlackRock Inc. is restructuring to concentrate more on portfolio construction and less on marketing traditional active and passive strategies.
The New York-based mega manager has a laser focus on four areas:
- Shifting to a portfolio construction approach for clients from a concentration on individual product selection.
- Satisfying investor demand in areas including illiquid alternatives, exchange-traded funds, factor-based investment strategies, and retirement plan design and investment management.
- Expanding the firm's technology prowess, including the development of a new defined contribution plan platform in partnership with Microsoft Corp.
- Increasing distribution capability in high-growth markets worldwide, especially in China and the rest of the Asia-Pacific region.
"Everything we are doing reflects our focus on the long term. This focus helps us keep us ahead of the changes in the market, staying in front of the needs of our clients and making sure that we're staying in front of our industry ... it guides our investments in our own business so that we are efficiently providing the full breadth of BlackRock's capabilities," said Laurence D. Fink, BlackRock's chairman and CEO, during the firm's Jan. 16 fourth-quarter earnings call.
Mr. Fink and other BlackRock executives were not available to provide more detail about the firm's restructuring plans.
In conjunction with the restructuring, BlackRock announced on Jan. 10 it will lay off 500 employees, or 3% of its workforce, over the next few weeks and bring on an unspecified number of new employees with needed skill sets.
"Market uncertainty is growing, investor preferences are evolving and the ecosystem in which we operate is becoming increasingly complex," said Robert Kapito, co-founder and president, in an internal memo obtained by Pensions & Investments.
The planned staff cuts are firmwide, across all departments and locations, and will happen over the next few weeks, changing "the size and shape of our workforce," Mr. Kapito said in the memo.
BlackRock's headcount was 14,000 as of Sept. 30, according to the firm's most recent 10-Q filing with the Securities and Exchange Commission.