Employees of Silicon Valley Bank have been offered 45 days of work at the successor organization set up by the Federal Deposit Insurance Corporation, which took control over the failed financial institution.
An email sent by the FDIC said that salaried employees would get 1.5 times their current wages and hourly employees would get double their normal pay. The note said the workers would be let go at the end of the 45-day period.
Silicon Valley Bank had around 8,500 employees at the end of last year, according to a regulatory filing.
The FDIC was appointed as the Santa Clara bank's receiver and has created a new entity called the Deposit Insurance National Bank of Santa Clara to protect insured depositors. All insured deposits of Silicon Valley Bank have been transferred to the new entity.
Silicon Valley Bank CEO Greg Becker previously sent out a video to employees explaining that he no longer manages the organization.
The main office and all branches of Silicon Valley Bank will reopen on Monday, March 13, 2023; all insured depositors will have access to their funds no later than Monday morning, the FDIC previously stated.
Regulators are seeking a buyer to take control of Silicon Valley Bank's assets and return deposit holdings to clients. The dramatic fall of what had previously been one of the startup ecosystem's most dependable funders has led to scrambling by the company's client base to meet payroll and pay expenses.
The bank's closure has had a number of knock-on effects, including in the affordable housing sector, which had relied on SVB for financing.
As of Dec. 31, 2022, Silicon Valley Bank had approximately $209 billion in total assets and about $175.4 billion in total deposits. A filing with the FDIC said as of the end of last year, approximately $151.6 billion of its deposits were uninsured.
Some tech investors and public officials have called for the federal government to step in and provide a solution and stem a potential contagion in the financial sector that could lead to the failure of additional institutions.
"Everyone is working with FDIC to stabilize the situation as quickly as possible, to protect jobs, people’s livelihoods, and the entire innovation ecosystem that has served as a tent pole for our economy," Gov. Gavin Newsom said in a statement.