US - BlackRock has laid off 89 employees in San Francisco as a result of its merger with Barclays Global Investors (BGI), which the firm completed yesterday.
A source familiar with the firm said the laid off employees were from both BlackRock and BGI and were terminated because their services overlapped. The source could not say if the affected employees were portfolio managers.
In a filing with California's Employment Development Department, BlackRock said it would terminate the employees on January 8, 2010. The staffers represent less than 1% of the total workforce of the new, combined company.
Others will be moving to San Francisco. Andrew Dyson, who was head of international institutional business in London, will now be based in San Francisco as global head of institutional.
BlackRock announced yesterday it had finalized the merger with BGI creating a US$3.2trn asset management powerhouse. The combined firm will operate under the BlackRock name while iShares, the firm's exchange traded fund business, will retain its separate brand.
The cash and shares deal was worth US$15.2bn, up from the originally announced $13.5bn. The price increased as BlackRock shares rose.
BlackRock's chairman and chief executive officer Laurence Fink said: "We move forward as one global firm, operating independently, focused solely on investment and risk management on behalf of our clients...We offer truly differentiated capabilities - active, enhanced and index products - and the most talented professionals, able to identify investment opportunities, develop innovative investment solutions, and capture the benefits of scale for clients."
The combined entity was supposed to be called BlackRock Global Investors, but officials changed the name because the firm was being referred to as "BGI".
In an e-mailed statement, BlackRock said: "This was causing an unintended connection to Barclays and compromised our intended use of BlackRock as shorthand."
BlackRock also said: "The master brand BlackRock allows more flexibility when working with different divisions and product groups."
The firm also said Barclays group chief executive John Varley and Barclays president Robert Diamond have joined the BlackRock board.
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