SVB collapse: Bank quietly laid off more than 100 employees before closure
Misty Severi
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Silicon Valley Bank reportedly fired over 100 employees two months before regulators came in and shut the company down, an internal email revealed.
The email, sent to employees in January, appeared to focus on non-client-oriented roles such as recruitment. It also cited “change and uncertainty” in the company’s economic future as the reason for the layoffs.
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“Unfortunately, our efforts to slow spending over the past several months have not been enough and these reductions are necessary,” the email, obtained by NBC News, read.
The layoffs came as other companies in California’s Silicon Valley trimmed their staffs as well. Among those were Facebook’s parent company, Meta, and smaller firms like Twilio. Higher interest rates from the Federal Reserve caused the companies to pinch their pennies and undo some of the hiring rush from the COVID-19 pandemic.
SVB CEO Gregory Becker said the company was also hiring people to backfill vacant slots, but the employees would be “cheaper” than the people they replaced.
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Employees at the bank were given bonuses at the time of its closure. They were also given a retention bonus to keep employees from jumping ship before the company was fully closed.
President Joe Biden said Sunday that the federal government will not bail out banks, but he guaranteed SVB deposits, including uninsured amounts, so customers would have access to their money on Monday. The closure of one of the country’s largest banks has led to a fear that the country could see a repeat of the 2008 economic crisis. However, the White House assured the public that was not the case.