BlackRock lays off employees during reorganization

BY SourceMedia | MUNICIPAL | 05/06/24 03:02 PM EDT By Jessica Lerner

BlackRock (BLK) has laid off several employees as the firm's municipal market division is in the midst of a reorganization.

At least nine employees have been laid off, including portfolio managers, credit analysts and managing directors, said a source familiar with the departures.

While BlackRock (BLK) declined to comment on the layoffs, the firm "continuously organizes its teams to better serve the market and our clients, and this week aligned our municipal bond investment team to help us accelerate processes, improve information sharing and drive performance," a BlackRock (BLK) spokesperson said in a statement.

There is a town hall scheduled for Monday, according to a source.

BlackRock (BLK) has seen some leadership changes over the past few months following the retirement of Peter Hayes, the former head of the firm's municipal bond group, chief investment officer and global head of the financial institutions group's (FIG) investment business.

Upon Hayes' retirement, Patrick Haskell became head of BlackRock's (BLK) muni group and the FIG business, while Sean Carney, head of the municipal strategy team, became chief investment officer of the firm's muni bond funds.

Haskell stepped aside as Morgan Stanley's (MS) head of municipals in August 2022, a move that came ahead of several months of sweeping turnover at the firm. Haskell, who joined Morgan Stanley (MS) in 2009, had led muni securities since 2013.

The BlackRock (BLK) layoffs come as the sell-side of the industry has been on a hiring frenzy since the start of the year, scooping up of banking and trading and sales teams from let-go talent from Citi and UBS. At least 65 people ? most likely more than that ? have landed at a multitude of firms so far this year, though the breakneck pace of hiring has slowed recently.

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.