BlackRock to axe Hong Kong retail sales head’s job among global lay-off of 500 positions

BlackRock, the world’s largest asset manager, will make about 500 jobs, or 3 per cent of its global staff, redundant in the weeks ahead, according to an internal memo to employees.

A single-digit number of positions in Hong Kong will be affected, including the head of retail business held since late 2012 by Julia Lee Siu-lie, according to two people familiar with the matter. Discussions for the employees’ exit are ongoing, they said.

"Market uncertainty is growing, investor preferences are evolving and the ecosystem in which we operate is becoming increasingly complex,” the asset manager’s president and co-founder Rob Kapito said in a company memo seen by the South China Morning Post. “As BlackRock has consistently demonstrated, environments like this also create opportunities for growth as long as we have the discipline to realise them.”

The redundancies follow a terrible year in global stock markets, where 86 of the world’s 94 primary equity indexes had declined. Shanghai’s Composite Index plunged by nearly 24 per cent last year, making it Asia's top loser, while Hong Kong’s benchmark Hang Seng fell by almost 14 per cent.

The market tumult has added pressure on global banks and financial institutions to slash cost, ranging from travel restrictions and expense caps to redundancies.

State Street Corporation, the second-oldest US bank to be in continuous operation, trimmed its senior management ranks by 15 per cent this week, according to Bloomberg. AQR Capital Management, the investment firm that famously trades with quantitatively driven models, is also cutting jobs after a dismal performance in 2018.

“There is no impact on our portfolio management team” in the Asia-Pacific region, a BlackRock spokeswoman said in Hong Kong. “The firm continues to perceive Asia-Pacific as a dynamic region for growth, and we are continuing to invest in the business. Our strategic priorities for the region remain unchanged.”

BlackRock’s share price fell by nearly 24 per cent last year, the worst performance since 2008. Revenue growth has also been slowing, with third-quarter revenue dipping 1 per cent from the previous period.

New York-based BlackRock had 14,900 employees worldwide as of September 2018. Since 2013, a big round of lay-offs had come every three years. The last time the company had cuts of this size was in March 2016 when it slashed 400 jobs. Before that, it cut jobs on a similar scale in 2013 after a reorganisation, according to Bloomberg.

"After several years of meaningful headcount growth, we are making some changes this week to the size and shape of our workforce,” said Kapito in his memo. “BlackRock is a growth company, and growth requires investment. The changes we are making now will help us continue to invest in our most important strategic growth opportunities for the future,” the memo said. "Given our scale, the strength of our client relationships, and the breadth of our investment and technology capabilities, we are better positioned than any other firm to benefit from the structural changes taking place in our industry.”