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Months before becoming the second largest bank in US history to fail, Silicon Valley Bank quietly laid off 100 to 120 employees, according to an internal email seen by NBC News.
The layoffs, made in January, amounted to only about 1.4% of SVB’s 8,500 employees. Two people familiar with the layoffs, who spoke on condition of anonymity, told NBC News that the layoffs appeared to be concentrated in non-customer roles, particularly in recruiting and talent acquisition.
An email sent Jan. 11 from the company’s human resources director said “change and uncertainty” in the economic outlook was behind the job cuts.
“Unfortunately, our efforts to slow spending over the past few months have not been enough and these cuts are needed,” the email said.
One of two SVB employees, who was not authorized to speak publicly, said the layoffs were “sort of swept under the rug”.
The company continued to hire from other areas of the business, primarily to fill certain roles.
But it underscored the bank’s efforts to cut costs at a time when businesses in its backyard were also cutting jobs.
The bank did not respond to a request for comment.
As tech giants like Meta licensed up to 13% of their employees, small businesses in the San Francisco Bay Area were also laying off jobs – from stitch correction For Twilio. The Federal Reserve’s interest rate hike had prompted tech companies to scrap Covid-era hiring, as management cowered over what it feared was a slowing U.S. economy.
In late 2022 and early 2023, Silicon Valley Bank noticed that deposits were beginning to flow, as the bank’s technology business clienteleventure capital funds and private equity firms adapted to the interest rate environment.
“We will look to cut costs in other areas,” Silicon Valley Bank CEO Gregory Becker told analysts on a Jan. 19 earnings call. The bank’s chief financial officer, Daniel Beck, added that “cheaper full-time employees” would help “optimize those expenses.”
Bank employees at the time of failure last Friday received bonuses the day the FDIC took over, with a retention bonus due April 1. To prevent SVB employees from quitting, the FDIC promised to pay 1.5 times their normal rates for 45 days to ensure an orderly liquidation of the bank.
Sunday, the The US government has decided to guarantee all deposits — even above the federal deposit insurance of $250,000 per depositor — at Silicon Valley Bank. When the bank reopened on Monday, the FDIC named former Fannie Mae CEO Tim Mayopoulous as the resurrected SVB’s new CEO. The company clarified that employees would return to normal pay and benefits, as workers for a “bridging bank” iteration of its former self.
“We are open for business. Therefore, we are returning to our normal pay rates,” said an email, seen by NBC News, from SVB’s human resources team sent Monday evening.
Jason Abbruzzese contributed.