JPMorgan Chase has announced around 1,000 First Republic Bank employees will be laid off following its recent acquisition of the majority of the bank’s assets.
First Republic Bank, based in San Francisco, experienced a major failure earlier this month which resulted in it being seized by the government, making it one of the largest bank failures in US history.
A spokesperson from JPMorgan said the bank informed all First Republic employees about their future employment status.
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Approximately 85 percent of the employees have been offered a transitional or full-time role within JPMorgan.
However, the remaining 15 percent, roughly 1,000 staff, have not received employment offers.
JPMorgan clarified that its agreement with the Federal Deposit Insurance Corporation (FDIC) to acquire most of First Republic did not include all of the bank’s employees.
JPMorgan said: “We’ve been transparent with their employees and kept our promise to update them on their employment status within 30 days.
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“We recognize that they have been under stress and uncertainty since March and hope that today will bring clarity and closure.”
Employees not offered a role will receive 60 days’ worth of pay and benefits.
Additionally, they will get a severance package that includes a lump sum payment, ongoing benefits coverage, and resources to aid them in finding new job opportunities.
The banking giant did not clarify how many First Republic employees offered jobs at the company will have full-time versus transitional roles.
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It said the transitional roles are expected to last between three and 12 months.
After First Republic’s closure, JPMorgan emerged as the successful bidder in the FDIC’s competitive process.
To finalize the deal, JPMorgan paid $10.6 billion to the FDIC.
However, critics, including Senator Elizabeth Warren, have raised concerns about the acquisition, expressing reservations about further consolidation within the banking industry.
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