JPMorgan Chase is cutting about 1,000 First Republic employees following its rushed takeover of the California-based bank earlier this month, said people familiar with the matter.
The job losses, which will be felt across all of First Republic’s businesses, are equal to about 15 per cent of its roughly 7,000 workers, the people said. JPMorgan notified the affected First Republic employees on Thursday that they would not be receiving an offer to move to JPMorgan, one of the people said.
The cuts are a further blow to First Republic employees who have already had a difficult two months. Following the collapse of Silicon Valley Bank and Signature Bank in March, customers of First Republic withdrew tens of billions of dollars of deposits. First Republic was ultimately shuttered as US regulators orchestrated its sale over a weekend to JPMorgan.
JPMorgan said it had followed through with a commitment to First Republic employees to provide clarity on their employment status within 30 days of the deal, which closed on May 1.
“We recognise 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 will be offered employment at JPMorgan Chase — either through a transition period, or in many cases full-time.”
Workers in transition roles will be employed for up to 12 months.
News of the cuts was reported earlier by Bloomberg.
JPMorgan, which has about 300,000 staff worldwide, said employees who had not been offered a new position would receive pay and benefits for two months and will be offered a lump-sum payment with continuing benefits.
The JPMorgan action is less severe than cuts planned by First Republic last month, days before it was sold, to cut as much as 25 per cent of its workforce in order to reduce costs.
Marianne Lake, co-head of JPMorgan’s consumer and community banking division, said in a presentation to investors on Monday that First Republic’s business had “seen stabilisation of clients and deposits”.
“In fact, since the acquisition we’ve actually seen a small net inflow of deposits, she said. “That’s something we’re very focused on both of those two things — stabilising and winning back the client and their business.”
First Republic primarily catered to well-off customers with millions of dollars in assets. JPMorgan’s acquisition will boost the Wall Street bank’s efforts to expand in wealth management.