JPMorgan fires 1,000 First Republic bank employees in a ‘four-minute, scripted phone call’ three weeks after taking over the bank
- About 1,000 First Republic employees were laid off by acquisitions bank JPMorgan on Thursday
- First Republic Bank collapsed in March after the collapse of Silicon Valley Bank and Signature Bank
- The remaining 85 percent of the remaining 7,000 employees were offered temporary employment for up to 12 months
JPMorgan laid off 1,000 First Republic Bank employees three weeks after taking over the bankrupt company.
Fired bank employees were notified in a four-minute phone call on Thursday that they were being fired with a severance package that included 60 days of extra pay and benefits, a source told Reuters.
The remaining 85 percent of First Republic Bank’s remaining 7,000 employees were offered temporary full-time and transitional positions for up to 12 months.
First Republic Bank was the third bank to fail in March following the collapses of Silicon Valley Bank and Signature Bank, as investors and depositors worried the bank would not survive as an independent entity.
According to AP, the bank was likely to fail due to its large amount of uninsured deposits and exposure to low-interest loans.
About 1,000 First Republic employees were laid off by acquisitions bank JPMorgan on Thursday. The remaining 85 percent of the remaining 7,000 employees were offered temporary employment for up to 12 months
First Republic Bank collapsed in March after the collapse of Silicon Valley Bank and Signature Bank
The layoffs were the final steps in the JPMorgan takeover, a spokesman said the employees were not blind.
First Republic said last month that its deposits fell by more than $100 billion in the first quarter. The bank’s CEO, Michael J. Roffler, is seen above
“Since our acquisition of First Republic on May 1, we have been transparent with their employees and kept our promise to update them on their employment status within 30 days,” a JPMorgan spokesperson told Bloomberg.
“We recognize that they have been under stress and uncertainty since March and hope that today will bring clarity and closure.”
The cancellations came a month after First Republic Bank announced they would cut 25 percent of jobs to help the failing company.
First Republic became the largest US bank to fail since 2008 after it was seized by regulators in early May and sold to JPMorgan.
Despite receiving a $30 billion lifeline from 11 major banks, shareholders continued to sell First Republic stock.
Depositors withdrew $100 billion from their lender accounts in the first quarter, causing it to collapse weeks later.
A deal for First Republic comes less than two months after Silicon Valley Bank and Signature Bank both failed
Global markets have regularly been rocked by concerns about banking sector turmoil since the collapse of Silicon Valley Bank.
But before Silicon Valley Bank went bankrupt, First Republic had a banking franchise that most of the industry envied.
Its clients – usually the wealthy and powerful – rarely defaulted on their loans.
The 72-branch bank has made much of its money from providing cheap loans to the wealthy, reportedly including Meta Platforms CEO Mark Zuckerberg.