SVB collapse will have ‘major’ impact on tech industry: Fears over mass layoffs and paycheck delays for thousands of employees at companies that do NOT bank with SVB – but use payroll providers that do

The collapse of Silicon Valley Bank today sparked fears of a contagion in the tech industry with mass layoffs predicted by experts if start-up firms fail to make payroll.

The Federal Deposit Insurance Corporation (FDIC) seized SVB’s assets today after depositors – mostly tech workers and start-up firms – triggered a run on the bank following the shock announcement of a $1.8bn loss.

With around $209bn in assets, SVB is the second-largest bank failure in US history after the 2008 collapse of Washington Mutual. The crash could decimate the tech sector as many start-ups use SVB as their sole account and creditor.