Months before becoming the second-largest bank in US history to fail, Silicon Valley Bank quietly laid off 100 to 120 employees, according to an internal email seen by NBC News.
The layoffs, made in January, accounted for only about 1.4% of SVB’s 8,500 employees. Two people familiar with the layoffs, who spoke on condition of anonymity, told NBC News the layoffs appeared to be concentrated in non-customer-facing roles, particularly recruiting and talent acquisition.
An email sent on January 11 by the company’s human resources director said «change and uncertainty» in the economic outlook were to blame for the job cuts.
“Unfortunately, our efforts to reduce spending in recent months have not been sufficient and these reductions are necessary,” the email said.
One of the two SVB employees, who was not authorized to speak publicly, said the dismissals were «like swept under the rug.»
The company continued to hire in other corners of the company, mainly to fill certain positions.
But he underscored the bank’s efforts to trim and cut costs at a time when businesses in its backyard were also cutting jobs.
The bank did not respond to a request for comment.
While tech giants like Meta were laying off up to 13% of their employees, smaller companies in the San Francisco Bay Area were also cutting jobs, from stitch arrangement to Twilio. Higher interest rates from the Federal Reserve had pushed tech companies to roll back Covid-era hires as management entrenched in the face of what they worried would be a slowdown in the US economy.
In late 2022 and early 2023, Silicon Valley Bank noticed deposits beginning to trickle as the bank’s clientele of tech companies, venture capital funds and private equity firms adjusted to the interest rate environment.
“We are going to look at cutting costs in other areas,” Silicon Valley Bank CEO Gregory Becker told analysts on a Jan. 19 earnings call. The bank’s chief financial officer, Daniel Beck, added that «cheaper full-time employees» would help «optimize that spending.»
Bank employees at the time of the bankruptcy last Friday received bonuses on the day the FDIC took over, with a retainer bonus due April 1. To prevent SVB employees from quitting, the FDIC promised to pay 1.5 times their normal rates over 45 days to ensure an orderly liquidation of the bank.
On Sunday, the US government moved to guarantee all deposits, even above the federal deposit insurance of $250,000 per depositor, at Silicon Valley Bank. When the bank reopened Monday, the FDIC named former Fannie Mae CEO Tim Mayopoulous as the new CEO of the resurrected SVB. The company clarified that the employees would return to normal wages and benefits, as workers for a «bridge bank» iteration of their former selves.
«We are open for business. Therefore, we are reverting to our regular pay rates,» said an email, seen by NBC News, from SVB’s human resources team sent late Monday.
jason abruzzese contributed.