JPMorgan to lay off 1,000 First Republic employees
JPMorgan Chase is laying off about 1,000 First Republic employees after its swift takeover of the California-based bank earlier this month, people familiar with the matter said.
The job losses, which will be felt at all First Republic businesses, are roughly 15 percent of its 7,000 workers, the people said. JPMorgan notified affected First Republic employees on Thursday that they would not receive an offer to move to JPMorgan, one of the people said.
The cuts are another blow to First Republic employees who have already had a tough two months. After the collapse of Silicon Valley Bank and Signature Bank in March, customers of First Republic withdrew tens of billions of dollars in deposits. First Republic eventually shut down as US regulators arranged its sale to JPMorgan over the weekend.
JPMorgan said it fulfilled its commitment to First Republic employees to clarify their employment status within 30 days of the deal, which closed on May 1.
“We understand that they have been under stress and uncertainty since March and hope that today will bring clarity and closure,” the bank said. “The vast majority of First Republic employees are offered employment with JPMorgan Chase — either on a temporary basis or, in many cases, full-time.”
Temporary employees are employed for a maximum of 12 months.
The cuts were previously reported by Bloomberg.
JPMorgan, which has about 300,000 employees worldwide, said employees who were not offered new positions will receive two months of salary and benefits, as well as a lump sum payment with continued benefits.
JPMorgan’s action is less severe than First Republic’s planned layoffs last month, days before its sale, to cut up to 25 percent of its workforce to cut costs.
Marianne Lake, co-head of JPMorgan’s consumer and community banking division, said in a presentation to investors on Monday that “customers and deposits have stabilized” at First Republic’s business.
“We’ve actually seen a small net inflow of deposits since the acquisition,” he said. “We’re putting a lot of emphasis on both of those things: stabilizing and getting customers and their business back.”
First Republic primarily served affluent clients with multi-million dollar assets. The JPMorgan acquisition boosts the Wall Street bank’s wealth management efforts.