JPMorgan Chase & Co. has informed around 1,000 employees of the former company that they will soon be out of a job, less than a month after purchasing First Republic Bank.
JPMorgan confirmed to FOX Business that it issued updates on future employment statuses to all First Republic employees on Thursday and was able to recruit roughly 85% of them for positions. Bloomberg broke the story that 1,000 people had been informed they will shortly be laid off.
According to a statement released by JPMorgan, “Since our acquisition of First Republic on May 1, we’ve been transparent with their employees and kept our promise to update them on their employment status within 30 days. “We recognize that they have been under stress and uncertainty since March and hope that today will bring clarity and closure.”
The company emphasized that it extended employment offers to “the vast majority” of First Republic employees and that the proportion of individuals who did not receive a job offer from JPMorgan was lower than the 20–25% workforce reductions the First Republic had previously disclosed in April. When the Federal Deposit Insurance Corporation (FDIC) approved JPMorgan’s proposal to acquire the San Francisco-based lender, First Republic was widely regarded as the bank most likely to fail next. First Republic started having difficulties when Silicon Valley Bank and Signature Bank failed in early March.
Before the local banking crisis, the First Republic was the envy of the majority of the sector, and the majority of its clientele were wealthy and influential people who hardly ever defaulted on their loans. In the first quarter, when the financial crisis was impacting Silicon Valley Bank and Signature, depositors withdrew more than $100 billion from the bank since a large portion of the bank’s deposits were uninsured because they exceeded the $250,000 FDIC limit.
Many terrified depositors from struggling smaller lenders transferred their money to larger organizations deemed “too-big-to-fail,” such as JPMorgan, the largest bank in the country.
JPMorgan stated in a statement regarding the employees of First Republic, “Employees who have not been offered a role will receive pay and benefits covering 60 days and will be offered a package that includes an additional lump sum payment and continuing benefits coverage”. “We’re also giving them resources to find new opportunities within the company or elsewhere,”
