New 1,000 Bank Employee Layoff by JPMorgan Creates Panic
The latest 1,000 bank employee layoff by JPMorgan (NYSE:JPM) is creating panic in the banking industry.
About 1,000 First Republic (OTCMKTS:FRCB) employees have lost their job across all of First Republic’s businesses, per Financial Times.
This equates to about 15% of its roughly 7,000 employees, people familiar with the matter said on Thursday.
“The cuts are a further blow to First Republic employees, who have already had a challenging two months.
Following the collapse of Silicon Valley Bank and Signature Bank in March, customers of First Republic withdrew tens of billions of dollars of deposits and the lender was ultimately shuttered by US regulators and sold over a weekend to JPMorgan,” said FT.
Within the next 30 days, JP Morgan will notify First Republic employees of their job status, and not everyone will be offered a position with the bank.
For those who are offered a job, they may be given either a permanent role or limited-term employment ranging from three to 12 months.
Since the takeover, First Republic employees have been left in the dark about their future with the company.
First Citizens Bancshares (NASDAQ:FCNCA) on Wednesday also laid off nearly 500 Silicon Valley Bank employees.
Morgan Stanley announced 3,000 job roles will be cut in second round of layoffs earlier this month.
The bank joins peers like Citigroup and Goldman Sachs, all of which have announced layoffs thanks to a dismal forecast for corporate deals and IPOs this year.
Read: JPMorgan CEO Urges SEC to Ban Shorting Bank Stocks
Other JPMorgan Banking News Today
JPMorgan is freezing customer bank accounts in the latest bank scandal.
Republican attorneys general from 19 states say the bank is “persistently” discriminating against its own clients and closing bank accounts without warning.
The law enforcement officials, led by Kentucky Attorney General Daniel Cameron, sent a letter to JPMorgan CEO Jamie Dimon stating that the banking giant’s practices go against the company’s own policies on equality, per Business Insider.
The letter, which has now been published by the Wall Street Journal, states that JPMorgan has repeatedly discriminated against customers based on their religious or political beliefs.
“It is clear that JPMorgan Chase & Co. (Chase) has persistently discriminated against certain customers due to their religious or political affiliation.
This discrimination is unacceptable.
Chase must stop such behavior and align its business practices with the anti-discrimination policies that Chase proclaims.”
The attorneys general cite the sudden account closure of a religious liberty organization as an example of the bank’s discriminatory practices.
In May 2022, Chase abruptly closed the National Committee for Religious Freedom’s (NCRF) checking account.
NCRF is a ‘nonpartisan, faith-based nonprofit organization dedicated to defending the right of everyone in America to live one’s faith freely.’
When NCRF inquired about the reason Chase closed the account, multiple bank employees stated that the decision came from the ‘corporate office.’ Specifically, NCRF’s executive director “was informed that a note in the file read that Chase employees were not permitted to provide any further clarifying information to the customer.’’
A JPMorgan representative told The Journal: “We have never and would never exit a client relationship due to their political or religious affiliation.”
Banks to Experience Major Fines Soon
The latest 1,000 bank employee layoff by JPMorgan is creating panic in the banking industry, but the industry is also experiencing other major setbacks.
The nation’s largest bank JPMorgan is facing a painful $1.5 billion fee that may also be felt by various other banks later this year.
The Federal Deposit Insurance Corporation’s board of directors approved a proposal to raise the fees banks pay to have depositors’ money insured.
This comes after the government insured depositors’ money that exceeded the $250,000 insurance cap at Silicon Valley Bank and Signature Bank to stem the panic that ensued from their failures.
In total, that depleted $15.8 billion from the FDIC’s Depositor Insurance Fund (DIF).
Banks that are FDIC-insured pay fees to the fund in exchange for coverage in the event that they fail.
To recover the $15.8 billion, the FDIC is proposing levying higher fees on banks that have more than $5 billion in uninsured deposits.
The FDIC is focusing on these banks since they benefited the most from the FDIC’s unprecedented actions in the wake of the collapse of SVB and Signature Bank, according to CNN.
The proposed rule would charge banks 0.125% annually for two years on all their uninsured deposits as of the end of last year after deducting $5 billion.
JPMorgan Chase would pay around $1.5 billion in additional fees given the bank had around $1.2 trillion in uninsured deposits at the end of 2022, according to FDIC records.
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Could it be that the Feds are closing in???
Leave your thoughts below.