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San Diego-based cryptocurrency bank Silvergate Capital has cut 181 jobs at its local headquarters as it resets its business after experiencing a massive deposit shortfall last quarter.
The bank has filed a Workers Adjustment and Retraining Notifications Act document with state employment officials detailing the local job cuts announced last week. They reached his 40% of all employees.
Layoffs span organizations from underwriting to customer service, business development to loan management, information technology to human resources. About two dozen of the jobs eliminated were senior positions. The chief credit officer and chief anti-money laundering and sanctions officer were also fired, according to WARN filings.
In a conference call with analysts last week, Chief Executive Officer Alan Lane said, “Throughout 2022, we will rapidly increase our headcount to accommodate our growing business and effectively serve our customers. “To account for the economic realities facing our business and industry today, it became clear that we needed to keep costs under control.”
Silvergate, a state chartered bank, specializes in providing financial infrastructure for the cryptocurrency trading industry. The past few months have been devastated by several crypto industry failures and bankruptcies, culminating in his high-profile FTX demise and fraud charges against founder Samuel Bankman Freed. it was done.
Over the past year, Silvergate’s stock has fallen 90%, falling from a range of $136 per share to Thursday’s closing price of $13.75.
Both FTX and its sister company, Alameda Research, were Silvergate customers. In the fourth quarter, bank deposits plummeted from his $11.9 billion to his $3.8 billion. This corresponds to a 70% reduction.
“Part of the reason we had to cut as much as our expenses was a reflection of where deposits settled in the fourth quarter,” said Lane.
Banks invested their deposits in liquid bonds, some of which they planned to hold to maturity. Instead, it was forced to sell quickly to meet depositors’ withdrawal demands.
As a result, the company posted a loss of $718 million in the fourth quarter. He also has $300 million in unrealized losses on a group of government and agency-backed securities held for sale.
At the end of the year, Silvergate had a total of $4.6 billion in cash and equivalents, more than remaining deposits from cryptocurrency customers.
Silvergate plans to claim $8 million in severance and job search assistance for laid-off workers. The bank will provide additional details on its financial position when it releases its official fourth quarter results on January 17.
UT Staff Writer Natallie Rocha contributed to this report.
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