As the crypto community eagerly awaits the approval of the Bitcoin exchange-traded funds (ETF), the Wall Street titans led by BlackRock are exploring possible ways to offer the new financial product compliantly.
The BlackRock team revealed plans to cut off its workforce days before the US Securities and Exchange Commission (SEC) is expected to provide feedback concerning the pending Bitcoin ETFs.
BlackRock Announces Headcount Reduction
In a December 6 report, the BlackRock team regretted that around 3% of the employees would be dismissed. A source privy to the information confirmed that around 600 employees will be leaving the world’s largest asset manager in the coming week.
The impending layoffs ignited mixed feelings among the crypto community. On the X platform, the BlackRock community engaged in embroiled dialogues concerning the layoffs.
According to a source familiar to the situation, BlackRock has regularly made internal changes to align the business to its core objective.
The internal changes result in headcount reductions and other changes in organizational structure. Last year, the BlackRock community dismissed the employees based on their performance.
Upon contacting the BlackRock spokesperson to inquire about the layoffs, the executive did not comment. However, in an earlier report, the BlackRock team announced plans to publish its fourth-quarter earnings on Friday, December 5.
BlackRock Awaits for Approval of Spot Bitcoin ETF
A review of BlackRock’s third-quarter earnings demonstrated that the company assets under management (AUM) reached $9 trillion, a decrease from 2022. For the past twelve months, BlackRock’s assets have been decreasing year-over-year.
Analysts project that BlackRock’s fourth-quarter shares will drop to $8.71, a 2.46% decrease from 2022. The reduction in BlackRock’s AUM came when the asset manager faced criticism after the company invested in Environmental Social Governance (ESG). The BlackRock ESG platform aims to reroute the investment dollars into public companies building on sustainable energy.
Reason Behind BlackRock Lay Offs
The primary objective of BlackRock’s ESG is to support the production of carbon-free products through sustainable corporate governance measures. Following the launch of BlackRock ESG, the assets manager battled a political lightning rod from the US regulators.
In a separate report, the market critics argued that the BlackRock layoffs aimed at supporting the asset manager to expand the business ahead of the approval of the spot Bitcoin Fund. The asset manager anticipates that the SEC will approve the Bitcoin ETF on January 10.
In a recent interview with Fox Business, the BlackRock team admitted after a long wait, the SEC might approve the spot Bitcoin ETFs. The asset manager added that last Friday, the BlackRock team and a dozen investment companies, including Grayscale, ARK Invest, 21 Shares, and Invesco, revised the 19b-4 filing according to the SEC guidelines.
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