Along with the assets and liabilities of their previous employer, the employees of Silicon Valley Bank (SVB) have been migrated over to the Silicon Valley Bank NA, a so-called bridge bank established by the Federal Deposit Insurance Corporation.
The first few days have been a roller coaster.
The employees were initially told that they’d keep their jobs for 45 days, with salaried workers getting 1.5 times normal pay and hourly workers receiving double their normal rate.
But on Monday night, employees were told that pay is reverting to normal rates and employees will have “continuous employment” with the bridge bank, meaning the 45-day employment period no longer applies, according to an email sent by the company’s human resources department.
In his first message to employees, the bank’s new CEO Tim Mayopoulos wrote that the plan is to operate the business of SVB “for the foreseeable future,” And that his goal was to grow the business and create as much franchise value as possible.
But even with that note of continuity, employees are still worried that they’re on tenuous footing.
SVB bled clients in the bank’s rapid collapse, leaving the institution without the business base to support its headcount of roughly 8,500 employees.
Regulators are still attempting to find a buyer for the bank, with The Wall Street Journal reporting that the FDIC told lawmakers in Washington that it is planning another auction for the institution.
The previous auction failed to garner any successful bids, but the categorization of the bank as a systemic part of the financial system allows for incentives like loss-sharing agreements, according to the Journal.
The timetable for the new auction is still to be determined. However, even if a white-knight buyer emerges, there is no guarantee that employees will keep their jobs, particularly with a greatly diminished book of business.
“If layoffs start soon, some people may actually have a shorter runway than the previous 45 days,” one employee said. “I’m trying to set my expectations low.”
Kevin Truong can be reached at firstname.lastname@example.org