BlackRock Inc.’s head count will be “broadly flat” in 2023 after the asset manager recently cut 500 jobs globally, the company’s CFO said.
The layoffs came with a $91 million restructuring charge in the fourth quarter, comprised primarily of severance and accelerated amortization on previously granted deferred compensation awards for the impacted employees, CFO Gary Shedlin said during a fourth-quarter 2022 earnings call.
In 2022, full-year revenue was down 8% to $17.9 billion. Average performance fees on assets under management was lower due to lower markets and dollar appreciation, Shedlin said. Earnings per share was down 16% year over year to $8.93, reflecting higher nonoperating income and a lower effective tax rate.
General and administrative expense in 2022 increased by 11% year over year, lower than the prior guidance of 13% to 15%, Shedlin said.
BlackRock expects a mid- to high-single-digit increase in 2023 core general and administrative expense, driven by the upcoming move to its new Hudson Yards headquarters in Manhattan, N.Y. Continued investment in technology and the annualized impact of migrating clients of its portfolio management software, Aladdin, to the cloud, will factor into that expense increase, he added.
“I think we are also mindful that we come through these periods of volatility generally better positioned than our competitors because of our diversified model that gives us the ability to continue to invest going forward when others simply can’t do it,” Shedlin told analysts.
During 2022, BlackRock allocated $1.2 billion of new seed and co-investment capital, and its private equity portfolio stood at approximately $3.9 billion at year-end, Shedlin said. It recently made a minority investment in Human Interest Inc., a provider of retirement plan solutions to small businesses in the U.S.
BlackRock also invested in stablecoin issuer Circle Internet Financial Ltd. in 2022, and became the primary manager of the cash reserves of Circle’s stablecoin USDC, Shedlin said.