Two months ago, First Citizens Bancshares acquired Silicon Valley Bank after the latter collapsed. On Wednesday, nearly 500 former employees of SVB were laid off. Those worker layoffs were announced via a company email, which described the job cuts as “difficult but necessary actions.”
First Citizens has confirmed that the laid off employees were largely from SVB’s commercial banking group. In addition, the company claims that none of the affected workers were in “client facing” roles. Company support workers located in India were also unaffected by the workforce reductions.
Why the worker layoffs occurred
Axios, which initially broke the news, reported that the email from First Citizens CEO Frank Holding Jr explained the decision. “Given the challenges faced by SVB in early 2023,” he wrote, “it is increasingly clear that we must make decisions to right-size our scope and scale to remain competitive.”
The news site later reported that the email also included notification that the affected employees would receive a call from HR. Reports suggest that those calls were conducted virtually. The laid off employees will apparently receive pay through the 9th of June and benefits through the end of that month.
As some observers have noted, some worker layoffs were expected in the aftermath of the acquisition. Indeed, when First Citizens acquired SVB, it did so without knowing the exact details of the failed bank’s deposit base. According to Holding’s email, the bank now has that data and is attempting to find the right workforce balance for its needs.
The worker layoffs represent a roughly 3% reduction in the size of First Citizens’ total workforce. A spokesperson for the company has confirmed that First Citizens will provide impacted workers with both severance and transition services. The company’s CEO has said that the company has made the departing employees’ transition its “top priority.”