JPMorgan letting go 1,000 First Republic employees
Less than a month after acquiring First Republic Bank, JPMorgan Chase & Co. has informed roughly 1,000 of the former institution’s employees they will soon be out of a job.
JPMorgan confirmed to FOX Business that it sent notices to all First Republic workers on Thursday providing them an update on their future employment statuses, and were able to offer jobs to nearly 85% of them. The news that 1,000 were told they would soon be let go was first reported by Bloomberg.
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“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,” JPMorgan said in an official statement. “We recognize that they have been under stress and uncertainty since March and hope that today will bring clarity and closure.”
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The company noted that it offered jobs to “the vast majority” of First Republic employees, and that the number of workers who did not receive an offer from JPMorgan was less than the 20-25% workforce reductions First Republic announced in April.
First Republic began struggling following the collapse of Silicon Valley Bank and Signature Bank in early March, and was widely seen as the bank most likely to collapse next when the Federal Deposit Insurance Corporation (FDIC) accepted JPMorgan’s bid to acquire the San Francisco-based lender.
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Before the regional banking crisis, First Republic was the envy of most of the industry and its clients mostly included the rich and powerful, who rarely defaulted on their loans.
But much of the bank’s deposits were uninsured because they were above the $250,000 limit set by the FDIC, so depositors yanked more than $100 billion out of the bank in the first quarter as the banking crisis was affecting SVB and Signature.
Many panicked depositors from the troubled regional lenders moved their funds to larger institutions seen as “too-big-to-fail,” such as JPMorgan, the nation’s largest bank.
“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,” JPMorgan said in its statement regarding the First Republic workers. “We’re also providing resources to help them find new opportunities here or outside the firm.”
FOX Business’ Lawrence Richard contributed to this report.