Blackrock Plans Layoffs, Amid ESG Pullback And Spot ETF Approval

Blackrock plans layoffs, amid ESG pullback and Spot ETF approval

BlackRock, the world’s largest money management firm, is reportedly planning to announce layoffs of around 600 employees, or 3% of its global workforce.

The decision by BlackRock to create a Bitcoin exchange-traded fund (ETF) has excited the cryptocurrency community. This move by BlackRock could pave the way for other financial institutions to enter the cryptocurrency market.

While layoffs are always difficult, we believe that this is the right move for the company as we continue to grow and scale.

This decision comes after a period of rapid growth in assets under management, and we are confident that it will help us continue to provide the best possible service to our clients. We appreciate your understanding and support during this time.

BlackRock streamlines

As BlackRock prepares to reduce its workforce by approximately 600 positions, the company is once again implementing a strategy that ties layoffs to employee performance metrics.

Last year, BlackRock laid off employees whose performance was deemed unsatisfactory, and the company is expecting to see similar results this time around.

Shares of BlackRock rebounded by 6 percent in 2023, despite a 21 percent decline in 2022. This was following the company’s announcement of layoffs, which will affect around 4 percent of its workforce.

BlackRock is laying off employees due to a decline in earnings. Analyst consensus for the Q4 anticipates a 2.46% year-over-year decline in earnings to $8.71 per share. This may be due to the company transitioning into a more mature phase in its business.

As of the end of Q3 in 2023, BlackRock’s AUM had fallen to $9 trillion from its peak of over $10 trillion in 2022. This coincided with BlackRock becoming a focal point of political scrutiny due to its adoption of Environmental Social Governance (ESG) investing.

Our investment strategy focuses on sustainable energy sector public companies and those actively working to reduce their carbon footprint. Corporate governance measures such as boardroom diversity are also important to us.

BlackRock’s ETF business boomed in 2017, with a record-breaking $187 billion influx into its products. Featuring ETFs that track a basket of securities and are traded on major exchanges, BlackRock’s ETF business is robust and growing rapidly.

BlackRock’s Bitcoin ETF approval

If the SEC approves the firm’s spot Bitcoin ETF application, it would place BlackRock among the top asset managers to offer a crypto investment product.

This would make it possible for retail investors to gain exposure to the volatile cryptocurrency market without having to purchase and store Bitcoin themselves.

The SEC is expected to announce their decision on Jan. 10, just days before the deadline to approve or reject the ARK 21 Shares spot Bitcoin ETF.

BlackRock is one of the leading contenders to offer a crypto investment product, which would make it possible for retail investors to gain exposure to the volatile cryptocurrency market without having to purchase and store Bitcoin themselves.

As the deadline for BlackRock’s Bitcoin ETF application rapidly approaches, the SEC is receiving an increasing number of amendment filings from other Bitcoin ETF hopefuls. With just days left before the SEC’s final decision, the race is on to see which applicant can win their approval.

On Jan. 5, BlackRock submitted a 19b-4 amendment for its spot BTC ETF application, joining other asset managers in their quest for a BTC ETF. Valkyrie, Grayscale, Bitwise, Hashdex, ARK 21Shares, Invesco Galaxy, Fidelity, Franklin Templeton, VanEck, and WisdomTree all submitted amendments on the same day.

Cryptocurrency exchanges are making moves to list investment securities directly exposed to cryptocurrencies. To complete the process, they must file S-1 documents with the SEC.

These filings are crucial steps, but the completion of S-1 documents is essential for U.S. exchanges to list shares of investment securities directly exposed to cryptocurrencies.

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