The nation’s largest bank is bringing 85% of First Republic employees over with its purchase of the failed bank, leaving about 1,000 without offers.
A sign for a First Republic bank branch is seen in Manhattan on April 24, 2023 in New York City. Spencer Platt via Getty Images
JPMorgan Chase is laying off about 1,000 First Republic employees following JPMorgan’s purchase of the failed bank earlier this month, according to media reports.
Bloomberg and Financial Times reported Thursday that the losses amount to about 15% of First Republic’s roughly 7,000 employees, according to people familiar with the matter.
Affected employees were notified Thursday that they would not receive employment offers from JPMorgan, sources said. Those employees will receive 60 days of pay and benefits, as well as packages that include lump sum payments and additional benefits coverage, Financial Times reported.
“We recognise that they have been under stress and uncertainty since March and hope that today will bring clarity and closure,” the bank said, according to Financial Times. “The vast majority of First Republic employees will be offered employment at JPMorgan Chase — either through a transition period, or in many cases full-time.”
Transition period employees will be retained for up to a year, according to the reports.
A JPMorgan spokesperson didn’t return a request for comment on the cuts.
Prior to First Republic’s sale, the beleaguered bank had said it would cut up to 25% of its workforce as a cost-cutting measure, according to Financial Times. First Republic had been caught up in the throes of economic uncertainty that also caused the failure of a handful of other banks in March.
One of those failed banks, Silicon Valley Bank, was acquired in March by Raleigh, N.C.-based First Citizens Bank. First Citizens laid off approximately 500 former SVB employees this week.
“Given the challenges faced by SVB earlier this year, we had to make the decision to right-size our scope and scale to remain competitive and ensure we have the strongest foundation in place to drive sustainable growth,” a First Citizens’ spokesperson said Wednesday.
Employees are not the only people in First Republic’s ecosystem to be affected by JPMorgan’s acquisition.
JPMorgan informed First Republic customers with personal lines of credit that they won’t continue to offer them when they come up for renewal, The Information reported Thursday.
JPMorgan doesn’t offer personal credit lines to its customers and doesn’t plan to start with this acquisition, according to correspondence viewed by The Information.
