A number of senior managers at two of the biggest asset management firms have left the business as the industry is facing several new changes.
Leland Clemons, the global head of BlackRock's ETF and index investing business, left the firm this month. Clemons was based in San Francisco. BlackRock didn’t immediately respond to a request for comment on his departure. Meanwhile, several MDs left State Street last month, including U.S. technology lead Purush Rachabattuni, Canadian sales head Mike Taylor, and Kevin Wong, the head of sector solutions in APAC. State Street didn’t respond to eFC inquiries. The nature of the exits is unclear.
Earlier this year, BlackRock and State Street said they would cut roughly 500 and 1,500 jobs, respectively, as much of the industry is feeling the pinch from recent market volatility. Roughly 15% of Boston-based State Street’s 1,500 planned job cuts will affect senior management, according to Bloomberg. New CEO Ronald O’Hanley noted late last month that State Street needed to “structurally decompress” upper management as the firm seeks to reduce expenses by as much as $75 million. Speaking at a conference in December, O’Hanley referenced the company’s automation plan, dubbed Project Beacon.
“When you do that, one, you’re simplifying the way business gets done at State Street,” he said. “But two, you just don’t need as many top-end senior managers to get the work done.” If you look to social media as a barometer, most of the cuts have likely already occurred. The number of people registered as current State Street employees on LinkedIn fell by nearly 170 over the last two months.
BlackRock’s cuts are also partially related to technology upgrades, though the firm suffered through a particularly rough fourth quarter with a revenue slide of roughly 9%. BlackRock stock tumbled by 23% in 2018, marking its worst performance since the financial crisis. The 500 cuts represent 3% of BlackRock’s global workforce. The 1,500 planned redundancies at State Street equate to 6% of its employee base.
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