Silicon Valley Bank Employees Offered 45 Days of Work by Federal Regulators

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Silicon Valley Bank employees were offered 45 days to work in a successor organization created by the Federal Deposit Insurance Corporation (FDIC), which took control of the bankrupt financial institution.

An email sent by the FDIC states that salaried employees will receive 1.5 times their current wage and hourly employees will receive double normal wages. The note stated that the workers would be fired after the 45-day period.

Silicon Valley Bank had about 8,500 employees at the end of last year, according to a regulatory report.

LOOK: SVB collapse explained in two minutes

The FDIC was appointed liquidator of the Santa Clara Bank and created a new organization called the Santa Clara National Deposit Insurance Bank 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 runs the organization.

Silicon Valley Bank headquarters and all branches will reopen on Monday, March 13, 2023; all insured depositors will have access to their funds no later than Monday morning, the FDIC said earlier.

Regulators are looking for a buyer to take control of Silicon Valley Bank’s assets and return deposits to customers. The precipitous fall from what was previously one of the startup ecosystem’s most trusted sponsors has left the company’s customer base struggling to pay salaries and pay expenses.

READ MORE: SVB becomes second bank to collapse due to startup founder as tech chaos continues

The bank’s closure had a number of side effects, including in the affordable housing sector, which was dependent on SVB for funding.

As of December 31, 2022, Silicon Valley Bank’s total assets were approximately $209 billion and total deposits were approximately $175.4 billion. A statement filed with the FDIC said that as of the end of last year, about $151.6 billion of its deposits were uninsured.

Some tech investors and government officials have urged the federal government to step in and provide a solution to stop potential contagion in the financial sector that could lead to the collapse of additional institutions.

“Everyone is working with the FDIC to stabilize the situation as quickly as possible, protect jobs, people’s livelihoods and the entire innovation ecosystem that has powered our economy,” Gov. Gavin Newsom said in a statement.

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