World’s Largest asset management firm Blackrock Inc (NYSE: BLK) is reportedly set to make a huge layoff ahead of the spot BTC ETF deadline.
According to Fox Business Network’s Senior Correspondent Charles Gasparino. Blackrock is likely to let go of 600 employees, which is approximately 3% of its total workforce.
The BLK stock price has responded negatively after this news came out. However, upon a daily time frame, the BLK stock has been trading in a downtrend since the end of 2023. This downtrend is mixed with the above news and hence one cannot imply the connection between the downtrend and the layoff news.
What are the reasons behind Blackrock layoffs?
There could be several reasons for these layoffs, some connecting with the Bitcoin ETF, some connecting with its financial and overall performance.
| KPIs | Quarter 3 | Quarter 2 |
| Revenue (in $ millions) | 4,522 | 4,463 |
| Growth % | 1.32% | |
| Total Operating Expenses | 2,885 | 2,848 |
| Growth % | 1.30% | |
| Employee cost % as of revenue | 31.40% | 32.00% |
| Employee cost % as of Total Expense | 49.90% | 50.20% |
One of the reasons could be the employee cost that the company is experiencing. The above data taken from the quarterly report of the company shows that the cost of the ‘salaries and other benefits’ to the employees were as high as 31% of the total revenue that they made in Q3 of this fiscal year.
The employee cost is almost half of the other operating expenses incurred. The decline in the numbers between both quarters indicates that the company was already trying to cut expenses over the cost of employees.
Blackrock Layoffs’ Connection with the Bitcoin ETF?
Another reason could be the increase in the chances of the bitcoin ETF approval, which is also associated with the Blackrock layoffs. It is a possibility that the management foresees the disapproval or approval of the spot ETF and is arranging its workforce accordingly.
Some experts are predicting that the reason is linked with the deadline of the Bitcoin ETF while some are predicting that it is a routine layoff to improve the operating profit margins. However, both sides are waiting for Wednesday when the official deadline will clear everything out.
Reaction and Prediction of Blackrock stock price
The current trend in the BLK stock is still bullish despite the fall in the price over the last week. This uptrend is also associated with the current trend of the S&P 500, which is bullish altogether. The support levels for the BLK stock price are at $754 and $702, while the resistance levels are at $814 and $822. The stock may touch its support level before making a major upside move.
Conclusion
The Asset management giant, Blackrock, has laid off 3% of its total workforce. This incident has left experts wondering whether it is because of the cost-cutting that the company is doing lately or Bitcoin ETF. The BLK stock price has been bearish since last week.
Technical Levels
- Support Levels: $754 and $702
- Resistance Levels: $814 and $822
Disclaimer
The views and opinions stated by the author, or any people named in this article, are for informational purposes only. They do not establish financial, investment, or other advice. Investing in or trading in stocks, cryptos or related indexes comes with a risk of financial loss.
Adarsh Singh is a true connoisseur of Defi and Blockchain technologies, who left his job at a “Big 4” multinational finance firm to pursue crypto and NFT trading full-time. He has a strong background in finance, with MBA from a prestigious B-school. He delves deep into these innovative fields, unraveling their intricacies. Uncovering hidden gems, be it coins, tokens or NFTs, is his expertise. NFTs drive deep interest for him, and his creative analysis of NFTs opens up engaging narratives. He strives to bring decentralized digital assets accessible to the masses.Adarsh Singh is a true connoisseur of Defi and Blockchain technologies, who left his job at a “Big 4” multinational finance firm to pursue crypto and NFT trading full-time. He has a strong background in finance, with MBA from a prestigious B-school. He delves deep into these innovative fields, unraveling their intricacies. Uncovering hidden gems, be it coins, tokens or NFTs, is his expertise. NFTs drive deep interest for him, and his creative analysis of NFTs opens up engaging narratives. He strives to bring decentralized digital assets accessible to the masses.
Source: https://www.thecoinrepublic.com/2024/01/08/the-real-reason-behind-blackrock-layoffs-what-are-they-hiding/