Silicon Valley Bank layoffs: First Citizens Bank lays off 500 employees of the lender

Silicon Valley Bank that was acquired by First Citizens Bank and Trust Company following its failure that sent ripples across the regional bank ecosystem in the US, is now reported to undergo a round of layoffs. First Citizens, two months after it bought the embattled lender, has decided to lay off nearly 500 Silicon Valley Bank employees. 

According to a report by Axios that quoted multiple sources, almost all of the layoffs were made in SVB’s commercial banking business. As per the email sent to all the employees by First Citizens CEO Frank Holding Jr, none of the positions that were eliminated were ‘client-facing’ or were India-based support staff. 

As per the report, less than 3 per cent of First Citizens’ total workforce would be impacted by the layoffs. 

Harding Jr said that given the challenges SVB faced earlier this year, it has become increasingly clear that they must make decisions to “right-size” their scope and scale to remain competitive. 

“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 an earlier report, the news site had said that following First Citizens’ deal, things were not going very great in the embattled bank. Scores of commercial bankers left, including 40 to HSBC and 20 to MUFG. The report, citing sources, said that First Citizens never got around to doing the due diligence which is the norm in large mergers. 

Sources told the site that First Citizens saw this as a financial opportunity but the strategic vision or integration plans were not mapped out. 

The start-up-focused Silicon Valley Bank became the largest bank to fail since the 2008 financial crisis. The sudden collapse of the bank sent the markets tumbling and left billions of dollars belonging to companies and investors. Following the collapse, customers of the bank lined up outside the bank’s Bay Area branch in Menlo Park. The Federal Deposit Insurance Corp (FDIC) promptly took over the bank and gave depositors full access to their insured deposits. 

Also read: SVB crisis fallout: What start-ups and VCs learnt from the collapse of Silicon Valley Bank

Also read: KPMG, Goldman Sachs, Bank of America, and Morgan Stanley sued over Silicon Valley Bank collapse