In a companywide email Wednesday morning, First Citizens Chairman and CEO Frank Holding Jr. said his Raleigh-based bank is laying off former employees of Silicon Valley Bank, the failed financial institution that First Citizens purchased two months ago.
Holding said some of the cuts will be “effective today.” His message came two days after First Citizens sued a rival bank for $1 billion over allegedly poaching 42 former Silicon Valley Bank employees.
“Given the challenges faced by SVB in early 2023, it is increasingly clear that we must make decisions to right-size our scope and scale to remain competitive,” Holding wrote. “As a result, we are taking difficult but necessary actions to ensure that our workforce and costs are appropriate for a bank our size.”
The layoffs will affect close to 500 people, or about 3% of First Citizens’ total workforce, bank spokesperson Barbara Thompson told The News & Observer. Thompson said the cuts impact employees across the country, including many who have been working remotely.
“These staffing adjustments will take place in select SVB corporate functions and do not include any personnel in client-facing positions,” Holding informed employees.
On March 10, the California-based Silicon Valley Bank was taken over by the federal government following a run on its deposits. A little more than two weeks later, First Citizens purchased SVB — acquiring all its U.S. branches, deposits and loans — in exchange for company stock worth up to $500 million.
Founded 125 years ago in Johnston County, First Citizens has been controlled for most of the past century by three generations of the Holding family. Its headquarters are in Raleigh’s North Hills neighborhood.
First Citizens has a track record of acquiring failed banks, having purchased more than 20 federally-assisted banks. Its Silicon Valley Bank deal made First Citizens the 16th largest U.S. bank by asset size, according to the Federal Reserve. It remains the fourth largest bank in the state, behind Bank of America, Wells Fargo, and Truist.
While known to acquire other banks, First Citizens does not have a history with what had been SVB’s main clientele: early-stage tech startups. Many have wondered how First Citizens would incorporate this venture-backed banking approach into its overall mission.
On Monday, First Citizens filed a lawsuit against HSBC, accusing the London-based financial institution of stealing former SVB bankers who the Raleigh bank said were key to SVB’s profitability. In the lawsuit, First Citizens asked the court for at least $1 billion in damages.
This story was produced with financial support from a coalition of partners led by Innovate Raleigh as part of an independent journalism fellowship program. The N&O maintains full editorial control of the work.
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