Blackrock to layoff 500 workers, joining other top firms in cost cuts

Wall Street banks and financial institutions are cutting costs to stay afloat as global deal-making slows and risks of a global recession loom.

Blackrock, the world's largest asset manager, is set to cut 500 jobs, joining a long list of top firms worldwide looking at lowering costs ahead of an expected recession this year, reported Bloomberg.

"The uncertainty around us makes it more important than ever that we stay ahead of changes in the market and focus on delivering for our clients," Chief Executive Officer Larry Fink and President Rob Kapito wrote Wednesday in a staff memo, according to Bloomberg.

The layoffs could be just a little over 2.5 per cent of Blackrock's employee base of 19,900, and the development points to worsening sentiment in financial markets, with companies, predicted to report poor earnings starting this week.

Last month, Blackrock's chief financial officer, Gary Shedlin announced a hiring freeze and cut to expenses to meet short-term performance challenges.

Watch |BlackRock plans to lay off 500 workers worldwide

Blackrock, which manages $7.96 trillion in assets, did not identify the industries most negatively impacted by the job cuts.

In the memo, the company's executives pledged to "control expenses responsibly" and make cost-effective investments.

Wall Street businesses are delaying recruiting plans and reducing employees due to the increasing recessionary risks and economic unpredictability.

With plans to remove 3,200 jobs this week, including from its core trading and banking operations, Goldman Sachs Group Inc. started one of its largest rounds of layoffs ever.

The global banking industry is staring at more layoffs, and estimates suggest at least 5,000 job cuts in the pipeline at various banks. Morgan Stanley has also cut about 2 per cent of its workforce or almost 1,600 employees.

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