Report reveals that Silicon Valley Bank is to cut 500 jobs

First Citizens, the new owner of the collapsed Silicon Valley Bank’s (SVB) US operations, is planning to cut 500 positions previously held by SVB employees, according to an email from First Citizens’ CEO, Frank Holding. The job cuts are expected to affect certain SVB corporate functions and not client-facing roles. This news was initially reported by the US-based news website Axios.

BBC reported that the job cuts could account for approximately three percent of the company’s workforce.

The collapses of SVB and Signature Bank raised concerns globally, and investors and governments prepared for a potential ripple effect. Following SVB’s collapse, Swiss banking giant Credit Suisse was quickly acquired by rival UBS. Credit Suisse recently revealed that it faced pressure from the Swiss government to prevent its own collapse.

HSBC acquired SVB’s UK operations for a nominal price of one pound.

Holding mentioned in the email that the team in India supporting SVB would not be affected by the changes.

First Citizens, based in North Carolina, has been acquiring troubled banks and has become one of the largest buyers of distressed banks in recent times.

CEOs of SVB and Signature Bank were recently questioned by US lawmakers during a hearing in the US Congress. They faced criticism for their risk management practices and high executive salaries.

During the hearing, former Silicon Valley Bank CEO Gregory Becker characterized the bank as well-managed and attributed the collapse to factors beyond his control.

Government reports have attributed the failures of both SVB and Signature Bank to poor management, considering the rapid growth of both lenders.

Louisiana Republican Senator John Kennedy questioned Becker about a decision to end a program to manage interest rate risk as the Federal Reserve adjusted its policy, asking if it was a “really stupid bet.” Becker responded by pointing out a series of unprecedented events that led to the current situation.

Georgia Democrat Raphael Warnock asked Becker if he believed he should have done anything differently, to which Becker replied that he and his executives made the best decisions possible given the available information at the time.

Becker was repeatedly questioned about his compensation, and he explained that the decision rested with the bank’s board. Becker’s total compensation over the last four years amounted to $40 million, a figure determined by the bank’s board.