JPMorgan To Axe 1,000 First Republic Bank Employees Weeks After Takeover

Wall Street giant JPMorgan Chase plans to cut about 1,000 jobs at First Republic Bank, weeks after buying the U.S. lender.

After acquiring a majority of assets in First Republic earlier this month, JPMorgan offered about 85%, or 7,000, of the lender's employees transitional or full-time job roles. Nearly 15%, or 1,000, employees did not receive an employment offer from the banking giant, as per CNN.

At the end of last year, First Republic had 7,213 employees, as per its most recent annual filing.

JPMorgan issued a statement, noting that the company's deal with the Federal Deposit Insurance Corporation to buy most of First Republic didn't include all of the lender's employees.

"We've been transparent with their employees and kept our promise to update them on their employment status within 30 days," JPMorgan said in a statement, first reported by Bloomberg. "We recognize that they have been under stress and uncertainty since March and hope that today will bring clarity and closure."

Employees who didn't receive a job offer from JPMorgan will get pay and benefits covering 60 days. They will also be offered packages with additional lump sum payments, continuing benefits coverage, and resources to find new job prospects.

JPMorgan, the biggest bank in the U.S., didn't release information on how many First Republic employees were offered full-time versus transitional roles at the company. It added that the transitional roles offered to some First Republic employees will last for a period of between 3-12 months.

Some laid-off First Republic employees spoke with The San Francisco Standard, describing the abrupt layoffs as the conclusion of the tense past few weeks. "There was no respect; they treated us like a red-headed stepchild," said one East Coast-based First Republic employee, who asked not to be named. "It's unnecessary to put anyone through that. I don't understand why [JPMorgan] is dragging this out."

Another First Republic employee called the layoff process "unceremonious" and "cutthroat," revealing that even the lender's high-level managers were not included in layoff discussions.

"Everyone has been kept in the dark, even high-level managers are not being consulted," the employee added.

San Francisco-based First Republic was acquired by JPMorgan Chase on May 1 for $10.6 billion in a deal involving a government seizure of the regional bank. On May 11, JPMorgan sent an email to First Republic employees, informing them that some employees would be laid off within weeks.

"In connection with any job losses, we would emphasize that in the normal course, JPMorgan hires tens of thousands of people in the United States each and every year, which means that there will be many opportunities for career redeployment," Jeremy Barnum, JPMorgan's chief financial officer, said at the time.

Over the past few months, First Republic witnessed a struggling time after the collapse of Silicon Valley Bank and Signature Bank in early March. First Republic, which was the 14th largest lender in the U.S. at the end of last year, was worth more than $20 billion at the beginning of April.

Layoffs at First Republic are being seen as the second major banking job cut in the Bay Area this week after around 500 former employees of Silicon Valley Bank were axed by new owner First Citizens Bank. Earlier this month, Morgan Stanley announced plans to lay off 3,000 workers in the company's second round of job cuts in the past six months.