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Thursday, March 31, 2016

BlackRock and SSgA Plan Cuts, Though of Very Different Scales

News summary by MFWire's editors

Two publicly-traded asset management titans are reportedly preparing layoffs, though over very different time frames and of very different scales.

Michael Rogers
State Street
President and Chief Operating Officer
Kiel Porter and Sabrina Willmer of Bloomberg report that, per unnamed sources, New York-based BlackRock [profile] plans to cut about 400 jobs in the coming weeks. That translates into a little over three percent of the workforce of the world's largest asset manager, and Bloomberg is calling the cuts BlackRock's biggest ever.

One unnamed source tells Bloomberg that, thanks to continued hiring in other areas, the BlackRock folks expect to end 2016 with a bigger headcount, despite the cuts. One source reportedly described the cuts as broad-based, both geographically and by business areas.

Meanwhile, the Boston Business Journal and the Boston Globe both report that Boston-based State Street plans to cut up to 7,000 jobs by 2020. That translates into nearly 22 percent of the asset manager and custodial bank's 32,000 employees around the globe. There's no word on how the cuts will impact State Street Global Advisors (SSgA) specifically.

Michael Rogers, State Street's chief operating officer, said at an investor conference last month that they State Street's team will shrink "across the globe [by] 6,000 to 7,000 people over the five-year process due to this technology." Per the Globe, the transcript of that conference just recently became available.

"Now most of these people will be redeployed into new business or are not replaced due to turnover, but that's a big savings for us across the world," Rogers added.

A State Street spokeswoman tells the Globe that the company "will also continue to hire in key areas of the business that are growing, such as data and analytics, or in areas where we need to add expertise." And State Street has still grown by 2,500 in recent years, despite prior layoffs.

Barron's, Fortune, MarketWatch, Pensions & Investments, and Reuters all also reported on the BlackRock cuts.

As State Street, the news about the long-term slimming down plan breaks as SSgA is poised to buy GE Asset Management. 

Edited by: Neil Anderson, Managing Editor

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