The Blackstone Group is cutting 70 jobs, or 5 percent of its 1,400-member workforce, across all business lines.
Blackstone, the world’s largest private equity firm, is cutting the positions after reporting steep losses last quarter. The publicly listed firm reported a third quarter loss of $509 million, including a $273.7 million loss on its real estate portfolio – a write-down in the value of its real estate assets of 10 percent.
Blackstone declined to comment about the job cuts.
The Steve Schwarzman-led firm is the most recent in a growing list of private equity firms that have cut back on staff amid the turmoil roiling the financial world. The Carlyle Group, 3i, Investcorp and American Capital all announced job cuts this month, most targeting back office-type positions.
3i cut back about 15 percent of its 600-employee staff, mostly focused on back office jobs like marketing and human resources. Carlyle terminated 100 workers out of its 1,000-member workforce, primarily in the US and also targeting back office positions, though some deal workers were included in the cuts. Carlyle also said it was closing its Menlo Park, California office, which had been open for less than a year.
Bahrain-based Investcorp said it was cutting 20 percent of its staff to cut costs, affecting its offices in Bahrain, London and New York. The cuts will cut across various business lines including private equity, real estate, hedge funds and technology.
American Capital, and affiliate European Capital, said it will eliminate 110 jobs and close two offices, representing a 19 percent reduction in the listed firm’s US and European workforces. The firm did not give details about what jobs would be cut or what offices would be closed.
Blackstone's news follow comments by president and chief operating officer Tony James in November that the firm had a $13 billion real estate “war chest” to invest in distressed assets and the debt of distressed sellers.
During the earnings conference call, however, James said it was “still a little early” for the firm to jump into the market, predicting real estate valuations would continue to decline. He said the lack of available credit would force holders of real estate assets – including many REITs – to sell their properties at discounted prices in the near future.