In November, GOP Sen. Tom Cotton offered some terse advice to woke corporate CEOs who advance liberal ideology and then expect Republicans to save them from Democratic crackdowns.
“Best of luck.
Now BlackRock, the world’s largest asset manager and possibly the most high-profile of the so-called environmental, social, and corporate governance (ESG) investment strategy, is planning to cut roughly 500 of its approximately 20,000 employees Wednesday, Bloomberg reported, citing an internal memo.
The cuts are the company’s first since 2019, as asset managers around the world struggled with plummeting markets in 2022, although the company remains roughly 5% larger than it was at the start of 2022, according to Bloomberg.
In the news: Florida CFO Patronis To Remove $2 Billion In BlackRock Assets Due To ESG Standards
The firm has been the target of significant criticism over its ESG policies, primarily by Republican state officials who argue that BlackRock’s focus on ESG violates its fiduciary responsibility to its clients as the firm has moved away from certain oil and gas investments.
BlackRock’s analysts recently predicted that, even in the likely event of a recession, inflation and elevated interest rates are unlikely to decline as fast as investors might hope in 2023, putting further stress on financial markets. Chief financial officer Gary Shedlin, speaking at an industry conference in December, said that the group feels “that a recession is a matter of when, not if,” according to Business Insider.
In October, the company said it was halting hiring, excepting critical hires, and that it was planning on reducing costs, according to Business Insider. While it had anticipated in January 2022 that core expenses would grow between 15% to 20% that year, it revised this target down to 13% to 15%.
CEO Larry Fink and President Rob Kapito informed staff of the cuts in a Wednesday morning memo, stressing that the firm was working efficiently and poised to grow despite the layoffs, according to Bloomberg.
In the news: OP-ED: As BlackRock Becomes BlueRock, A RedRock Is Coming
“Our breadth and resilience enable us to play offense when others are pulling back,” Fink and Kapito wrote, according to Bloomberg.
BlackRock shares fell 23% in 2022, faster than the S&P 500’s 19% decline, according to Bloomberg. Shares were little changed following the news, down half a percent on the day at time of writing, according to Google Finance.