America’s biggest bank by assets, JPMorgan Chase (NYSE:JPM), has started streamlining the government-brokered acquisition of First Republic Bank. Sources said that JPMorgan is set to cut roughly 1,000 employees at First Republic. The job cut represents 15% of First Republic’s total workforce, better than the 25% reduction planned by First Republic before the takeover.
The bank is compensating the employees that are being laid off with two months’ worth of salary and benefits, as well as a lump sum payment with continuing benefits.
Commenting on the layoffs, the bank said, “We recognize that they have been under stress and uncertainty since March and hope that today will bring clarity and closure. The vast majority of First Republic employees will be offered employment at JPMorgan Chase — either through a transition period or in many cases full-time.” Meanwhile, workers in transition will work for up to 12 months.
Through the acquisition, JPM hopes to strengthen its wealth management business, as most of First Republic’s customers were wealthy individuals from California. As per JPM’s latest updates, the bank has witnessed smaller inflows of deposits from First Republic customers since its acquisition.
Is JPM Stock a Buy or Sell?
Analysts are highly bullish on JPM’s stock trajectory. On TipRanks, the stock commands a Strong Buy consensus rating based on 14 Buys and four Hold ratings. Also, the average JPMorgan Chase price forecast of $161.53 implies 19.1% upside potential from current levels. Meanwhile, year-to-date, JPM stock is up nearly 2%.
