JP Morgan, the new owner, eliminates 1,000 positions

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By Creative Media News

After acquiring bankrupt US lender First Republic Bank this month, Wall Street titan JP Morgan Chase is laying off employees.

Around 1,000 positions, or 15% of the total workforce, will be eliminated.

Also this week, First Citizens, which recently acquired the US division of another troubled lender, announced layoffs.

Earlier this year, issues with regional banks in the United States sparked concerns of a more widespread crisis.

Jp morgan, the new owner, eliminates 1,000 positions
Jp morgan, the new owner, eliminates 1,000 positions

JP Morgan confirmed that it was eliminating positions held by bank employees in San Francisco, but did not provide a figure for the job losses.

The affected employees will receive pay and benefits for sixty days, in addition to a flat sum payment and additional benefits.

JP Morgan also stated that it would help them locate new positions within or outside the company.

A JP Morgan spokesperson said in a statement, “Since we acquired First Republic on May 1, we have been transparent with their employees and have kept our promise to update them on their employment status within 30 days.”

The spokesperson added, “We recognize that they have been under stress and uncertainty since March and we hope that today will bring clarity and closure.”

At the end of last year, First Republic was the fourteenth largest lender in the United States. It was known for its large home loan business and roster of affluent customers. It was valued at more than $20 billion (£16,2 billion) at the start of April.

However, it came under pressure after the failure of several US lenders, including the technology-focused Silicon Valley Bank (SVB), sparked concerns about the health of the banking system.

Later in April, First Republic reported it had lost approximately $100 billion in deposits as consumers withdrew funds.

JPMorgan bought First Republic for $10.6 billion in a regulator-brokered deal earlier this month.

As interest rates rose, bank bonds lost value, causing market-wide fears.

First Republic’s failure is the second-largest in U.S. history. After regulators sold the bank to JP Morgan Chase Bank, its 84 offices in eight states reopened this month.

First Citizens bought SVB’s US businesses, while London-based HSBC bought its UK operations.

First Citizens also plans to eliminate approximately 500 positions held by former SVB employees.

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