Jobs are been cut at (First Republic Bank) now JP Morgan the failed U.S. lender, following its acquisition this month. About 1,000 positions, or 15%, of the First Republic’s workforce will be cut, according to the BBC.
Also this week, First Citizens, which bought the US unit of another struggling lender, announced job cuts.
Earlier this year, problems at regional US banks raised fears of a wider crisis.
The company announce job positions are been cut at the San Francisco-based bank, but did not give a figure on job losses. Affected employees will receive wages and benefits for 60 days, as well as a package that includes a one-time payment and other benefits.
JP Morgan also says it helps them find new roles inside or outside the company.
A JP Morgan spokesperson said: “Since we acquired First Republic on May 1, we’ve been transparent with their employees and made good on our promise to keep them informed of the status. their employment within 30 days”.
“We recognize they have been tense and uncertain since March and hope today will bring clarity and closure,” the spokesperson added.
First Republic, known for its large home loan business and affluent clientele, was the 14th largest lender in the United States at the end of last year. They were worth more than $20bn (£16.2bn) at the start of April.
The company came under pressure after the collapse of many U.S. lenders, including the tech-focused Silicon
Valley Bank (SVB), raising concerns about the health of the banking system.
At the end of April, First Republic said it lost about $100 billion in deposits as customers switched to withdrawing.
Earlier this month, First Republic will be taken over by JPMorgan under a $10.6 billion deal brokered by regulators. Concerns about the value of bonds held by banks in general is raising, as rising interest rates have made those bonds less valuable.
The defeat of the First Republic was the second largest defeat in American history. Earlier this month, the bank’s 84 offices in eight states reopened as branches of JP Morgan Chase after regulators took control and sold it to the Wall Street institution.
Meanwhile, SVB’s US operations have been taken over by First Citizens, with UK operations having been taken over by London-based banking giant HSBC.
First Citizens also plans to cut about 500 positions held by former SVB workers, according to the BBC. In an email seen by GIN this week, First Citizens chief executive Frank Holding highlighted the problems SVB faced earlier this year and said the cuts would affect: “select positions” company performance of SVB and not put any staff in customer contact positions.”
