Founders and venture capitalists aren’t the only ones experiencing volatility right now: Silicon Valley Bank employees are seeing their jobs in flux as their employer falls apart. SVB, which was closed down yesterday, is now being run by regulators. And while employees are no longer employed by the bank, they got an e-mail from “the office of the CEO” saying that they have jobs for the next 45 days at 1.5x their current salary.
The e-mail, confirmed by multiple sources to TechCrunch, says that the enrollment process for all SVB employees into the Deposit Insurance National Bank of Santa Clara (DINBSC) will happen through the weekend. Along with the uptick in pay and momentary employment, the e-mail explains that hourly workers will be paid double if they work overtime. Employment for all is contingent on “acceptable performance.”
“The FDIC requests that all existing Silicon Valley Bank employees working in the United States, including essential contractors, continue their work for the DINBSC,” the email reads.
SVB had additionally sent out a memo to employees advising them to work from home until further notice, as it engages in “conversations to determine next steps for the bank,” according to typically reliable market tracker Deltaone. This weekend’s memo says that existing remote work arrangements should continue except for “essential staff, branch employees, and contractors.”
“Without commenting on salaries, it’s our standard practice to ask bank employees to assist with an orderly transition as part of our resolution process,” an FDIC spokesperson told TechCrunch over email.
Axios also published a story today, citing sources, stating that Silicon Valley Bank paid out previously scheduled annual bonuses to eligible U.S. employees hours before regulators took over. The bonuses were not sent to all employees, specifically those based in other countries.
The series of moves comes after SVB announced on Wednesday that it lost $1.8 billion in the sale of U.S. treasuries and mortgage-backed securities that it had invested in, owing to rising interest rates. The bank also said that it was raising more capital and investing into higher-yield products. Panic ensued, leading the share price to tank more than 50% as it encountered a stampede of withdrawals from founders being advised by their VCs to pull money or diversify out of the bank.