Months before becoming the second largest bank to fail in US history, the Silicon Valley bank quietly laid off 100 to 120 employees, according to an internal email seen by NBC News.
The January layoffs represent only 1.4% of SVB’s 8,500 employees. Two people familiar with the layoffs, who spoke on the condition of anonymity, told NBC News that the layoffs were concentrated in non-client facing roles, specifically in recruiting and talent acquisition.
An email sent by the company’s chief human resources officer on January 11 said “changes and uncertainty” in the economic outlook are responsible for the job cuts.
“Unfortunately, our efforts to slow spending over the past several months have not been sufficient and these cuts are necessary,” the email read.
One of the two SVB employees, who was not authorized to speak publicly, said the layoffs were “swept under the rug.”
The company continued to hire in other corners of the company, primarily to fill certain roles.
But it underscored the bank’s efforts to reduce costs and cut costs at a time when companies in its backyard are also cutting jobs.
The bank did not respond to a request for comment.
As tech giants like Meta laid off 13% of their workforce, smaller firms in the San Francisco Bay Area were also cutting jobs — from Stitch Fix to Twilio. The Federal Reserve’s higher interest rates had prompted tech companies to undo Covid-era hiring after what management worried would slow the US economy.
In late 2022 and early 2023, the Silicon Valley bank saw deposits begin to decline as the bank’s customers of tech companies, venture capital funds and private equity firms adjusted to the lower interest rate environment.
“We’re going to cut costs in other areas,” Silicon Valley Bank CEO Gregory Baker told analysts on the Jan. 19 earnings call. The bank’s CFO, Daniel Beck, said “cheaper full-time employees” would help “optimize that expense.”
The employees of the bank were paid bonus last Friday at the time of the failure The day the FDIC took over with the retention bonus on April 1st. To prevent SVB employees from being laid off, the FDIC promised to pay them 1.5 times their normal rates for 45 days to ensure an orderly closing of the bank.
On Sunday, the US government moved to guarantee all deposits at the Silicon Valley bank – well above the federal deposit insurance cap of $250,000 per depositor. When the bank reopened on Monday, the FDIC appointed former Fannie Mae CEO Tim Mayopoulos as the new CEO of the revived SVB. The company clarified that employees are going back to normal pay and benefits as employees for the “Bridge Bank” iteration of their former self.
“We are open for business. That’s why we are reverting to our regular pay rates,” said an email seen by NBC News sent Monday night by SVB’s human resources team.
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