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SVB Collapse: The failure of Silicon Valley Bank, one of America’s largest banks, has started showing a wide impact. This is not only a big crisis for the banking world, but many other sectors are also going to be deeply affected by this. A significant number of startups are also among those affected by the crisis. The crisis of paying salaries to their employees has arisen in front of them.
Impact on processing of payroll
According to a Bloomberg report, after the failure of Silicon Valley Bank, many startup founders are worried about how they will pay their employees now. Payroll service provider Ripple told its customers on Friday that SVB was helping them handle payments. Due to this some payroll processing has now stopped.
effect is visible
Rippling CEO Parker Konard made a tweet on Friday after the news of the collapse of Silicon Valley Bank came to light. He said that his company has taken the help of JP Morgan Chase after the collapse of SVB, but this is not enough. Many paychecks have already been sent to SVB and are yet to be paid. Rippling is still trying to understand what the impact of SVB’s collapse would be.
Mass layoffs possible
At the same time, startup founder Brad Hargreaves expressed the possibility of layoffs on a large scale due to this incident. He said that some companies will not be able to make payroll payments next week. Since the boards are very sensitive about the hiring of such employees, there could be a massive job loss on Monday and later.
money not withdrawn on friday
Sarika Bajaj, CEO of Early Age startup Refibird, told that she has been a customer of Silicon Valley Bank for the last three years. Most of the funds of his company are deposited with SVB only. Bajaj told that she went to the Silicon Valley Bank branch on Sand Hill Road, California on Friday. She tried to withdraw the money but could not. Now he is worried about the parole of himself and two members of his team.
Industry experts say that dozens of new tech companies have deposited most of their funds in Silicon Valley Bank. Now the collapse of the bank has created a crisis in front of them.
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