JPMorgan Chase laid off 15% of First Republic Bank’s former employees on Thursday, according to a report by The San Francisco Standard. The approximately 1,000 affected staffers were informed of the decision in brief, scripted phone calls and will receive pay and benefits for 60 days.
Most of those let go were workers that First Republic intended to lay off before it was seized by regulators and acquired by JPM earlier this month, an anonymous source tells Bloomberg. The other 85% of the roughly 7,000 people employed by First Republic at the time of the takeover were offered transitional or full-time roles at JPM.
In a series of scripted calls made this morning, it was conveyed to roughly 1,000 employees at First Republic Bank that their services were no longer required.
First Republic Bank was a San Francisco-based regional bank that was founded in 1985. The bank specialized in providing wealth management and private banking services to high-net-worth individuals and families. First Republic had a strong reputation for customer service and was known for its high-touch approach to banking.
In early 2023, First Republic began to experience financial difficulties. The bank’s loan portfolio was heavily concentrated in the technology sector, and as the tech industry began to slow down, First Republic’s loan losses began to increase. In addition, First Republic was facing increasing competition from larger banks, such as JPMorgan Chase.
As First Republic’s financial situation worsened, the bank began to lose deposits. In March 2023, First Republic announced that it would be laying off 20% of its workforce. However, the layoffs were not enough to stop the bank’s decline. In April 2023, First Republic announced that it would be seeking a buyer.
In May 2023, JPMorgan Chase agreed to acquire First Republic for $10.6 billion. The acquisition was approved by regulators in June 2023, and the deal closed on July 1, 2023.
The acquisition of First Republic by JPMorgan Chase was a major event in the banking industry. First Republic was one of the most successful regional banks in the country, and its acquisition by JPMorgan Chase was seen as a sign of strength for the larger bank. The acquisition also gave JPMorgan Chase a significant presence in the wealth management market.
The layoffs of 1,000 First Republic employees are a sign of the challenges that the banking industry is facing. The tech industry slowdown and the increasing competition from larger banks are putting pressure on regional banks like First Republic. It remains to be seen how JPMorgan Chase will integrate First Republic’s operations and whether the acquisition will be a success for the larger bank.