Around 800 employees of Silicon Valley Bank in Bengaluru’s Manyata Embassy Business Park are facing uncertain times as the bank collapsed over the weekend due to a two-day long bank run. The bank was a crucial lender for startups globally and held huge deposits belonging to venture capitalists and startups. Its deposits rose to USD 189.20 billion in 2021 from USD 102 billion.
The bank purchased over USD 80 billion in mortgage-backed securities with the deposits for its hold-to-maturity portfolio. However, as the US Federal Reserve kept hiking interest rates to bring down the rising inflation after the Covid-19 pandemic, the value of these securities fell. The bank’s decision to sell around USD 2 billion worth of its bonds caused uncertainty among depositors and led to a bank run on Thursday and Friday.
The bigwigs of the bank, including the CEO, CFO, CMO, and general counsel, sold parts of their shareholding in the company. The FDIC took over the bank and offered the employees 45 days of employment at 1.5 times their salary. However, it remains unclear if this will apply to employees in India.
As they were already working from home, most did not go to the office on Monday as there was no official communication about the bank’s future and their career there.
The future of the 800 employees remains unclear. They are now in a state of limbo as they await further communication from the bank’s management. Despite this, they are trying to support each other on LinkedIn during this difficult time.
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