Less than a month after acquiring failed First Republic Bank, JPMorgan Chase & Co. plans to reduce the bank’s staff by 15%, or about 1,000 workers.
According to published reports, the nation’s largest bank by assets on Thursday offered full-time or temporary roles to nearly 85% of the approximately 7,000 people still employed by First Republic. The other 15%, or about 1,050, were told they would not receive offers. The temporary roles will be for between three and a year, depending on the job, the reports said.
Bloomberg News was first to report the jobs cuts.
"We've been transparent with their employees and kept our promise to update them on their employment status within 30 days," a company spokesman said in a statement.
Employees not being retained will be offered wages and benefits for 60 days, as well as severance packages that include additional lump sum payments and continuing insurance coverage, the bank said.
First Republic was the largest U.S. bank to fail since 2008 and the second-largest overall, after it was seized by regulators earlier this month and then sold to JPMorgan.
At the time of the acquisition, JPMorgan Chief Financial Officer Jeremy Barnum said that, “In connection with any job losses, we would emphasize that in the normal course, JPMorgan hires tens of thousands of people in the United States each and every year, which means that there will be many opportunities for career redeployment."
The demise of First Republic followed two other large failures in the past two months, joining Santa Clara, Calif.-based Silicon Valley Bank (SVB) and New York-based Signature Bank, which both collapsed in March.
First Republic lost about $100 billion in deposits in March in the wake of the collapse of SVB. It threatened to sink for weeks afterward, even after some of America’s largest banks provided $30 billion in deposits to keep it afloat. JPMorgan said those deposits will be repaid after the deal closes.
“Our government invited us and others to step up, and we did,” Jamie Dimon, chairman & CEO of JPMorgan Chase, said at the time of the deal. “Our financial strength, capabilities, and business model allowed us to develop a bid to execute the transaction in a way to minimize costs to the Deposit Insurance Fund.”
The FDIC estimated the cost to the federal Deposit Insurance Fund will be about $13 billion.
JPMorgan said the acquired First Republic businesses will be overseen by its Consumer and Community Banking (CCB) Co-CEOs, Marianne Lake and Jennifer Piepszak.
“First Republic has built a strong reputation for serving clients with integrity and exceptional service,” Lake and Piepszak said in joint statement at the time of the acquisiton. “We look forward to welcoming First Republic employees. As always, we are committed to treating employees with respect, care and transparency.”
