BlackRock Plans 3% Workforce Cut as Bitcoin ETF Deadline Approaches

BlackRock, the world’s leading asset management firm, is gearing up for an organizational restructuring. The company plans to cut around 3% of its global workforce, which translates to approximately 600 employees. This move, reportedly imminent, aligns with BlackRock’s strategic adjustments and recent performance metrics.

The decision coincides with BlackRock’s expectations of obtaining approval from the U.S. Securities and Exchange Commission (SEC) for its new spot Bitcoin ETF. The layoffs, while deemed a standard practice within the company, follow a phase of considerable expansion in terms of assets under management (AUM). BlackRock has experienced a noteworthy rebound in its shares, with a 6% increase in 2023 after a 21% dip the previous year.

Despite the cuts, BlackRock’s financial footing remains strong. The company’s AUM, as of Q3 2023, was a massive $9 trillion, although this is slightly lower than its 2022 peak of over $10 trillion. The forthcoming layoffs reflect a strategic shift as BlackRock enters a more stable phase of business after years of AUM growth. Analysts are predicting a slight dip in the firm’s Q4 earnings, expecting a 2.46% year-over-year decrease to $8.71 per share.

The possible SEC approval of BlackRock’s spot Bitcoin ETF application is another key factor. The approval, expected around January 10, would position BlackRock as a major player in offering cryptocurrency investment products. Interestingly, this date aligns with the SEC’s decision deadline for the ARK 21 Shares spot Bitcoin ETF.

BlackRock’s own Bitcoin ETF decision deadline is slated for January 15, following recent amendments filed by various spot Bitcoin ETF applicants. The firm has remained tight-lipped about the layoffs, with a spokesperson declining to comment ahead of the Q4 earnings announcement scheduled for Friday.