Mass layoffs at Silicon Valley bank: First Citizens Bank trims 500 jobs
Following its tumultuous failure that reverberated through the regional bank ecosystem in the US, Silicon Valley Bank, which was acquired by First Citizens Bank and Trust Company, is now facing an impending round of layoffs. Approximately 500 employees of Silicon Valley Bank are expected to be laid off, as First Citizens Bank takes action two months after acquiring the troubled lender.
Nearly all of the reported layoffs at Silicon Valley Bank (SVB) were concentrated in its commercial banking division, according to sources cited in a report by Axios. In an email sent to all employees, First Citizens CEO Frank Holding Jr clarified that none of the eliminated positions were "client-facing" roles or comprised support staff based in India.
The report indicated that the layoffs will affect less than 3 per cent of the overall workforce at First Citizens. In light of the difficulties experienced by SVB earlier this year, Harding Jr stated that it has become evident that they need to make adjustments to the size and scale of their operations in order to maintain competitiveness.
“As a result, we are taking difficult but necessary actions to ensure that our workforce and costs are appropriate for a bank our size. That means that some members of our team will be transitioning out of the business effective today,” said Harding Jr in the mail, as per the report.
In a previous report, the news site highlighted the challenges faced by the embattled bank after the deal with First Citizens. Numerous commercial bankers departed, with 40 joining HSBC and 20 joining MUFG. According to sources cited in the report, First Citizens failed to conduct the customary due diligence typically seen in large-scale mergers.
According to sources, First Citizens viewed the acquisition of Silicon Valley Bank primarily as a financial opportunity, without adequately mapping out strategic vision or integration plans. The failure of Silicon Valley Bank, which focused on supporting start-ups, marked the largest bank failure since the 2008 financial crisis.
The sudden collapse of the bank had a ripple effect on the markets and caused significant losses for companies and investors. In the aftermath, customers of the bank formed long queues outside the Menlo Park branch in the Bay Area. The Federal Deposit Insurance Corp (FDIC) swiftly stepped in to take over the bank and ensured depositors had full access to their insured funds.