Lehman Brothers Laying Off 5% of Global Workforce
Investment bank Lehman Brothers is laying off 5 percent of its work force across all lines of its business, CNBC has learned.
The cuts are to come today, said sources within the firm who added that they expect further layoffs at Lehman.
Lehman employed about 28,600 people as of Nov. 30, 2007, according to the company's most recent annual report.
Shares of Lehman were down more than 5 percent Monday.
Prior to Monday, Lehman had eliminated close to 4,000 jobs in the last year. Many were in its mortgage operations, which have been hurt by the nation's housing slump. Lehman is the largest underwriter of U.S. mortgage bonds, Thomson Financial said.
"There's a structural imbalance in the financial services industry," said Michael Poulos, head of financial services in North America at Oliver Wyman, a consulting unit of Marsh & McLennan Cos
Lenders worldwide have suffered well over $160 billion of write-downs as tight credit market conditions caused losses tied to mortgages and other risky debt.
Several major U.S. investment and commercial banks, including Bank of America
Lehman has withstood subprime mortgage problems better than many rivals, and boosted profit 5 percent in its 2007 fiscal year. Chief Executive Richard Fuld was awarded about $22 million of compensation in that year, though about one-third came from stock-based awards for work in the prior year.
The company is expected to show a roughly 47 percent decline in first-quarter earnings when it reports results on March 18, according to Reuters Estimates.
Poulos said more job cuts are possible in the industry.
"We are definitely fielding a higher number of inquiries from clients looking for help in making their expense base reflect the market environment," he said.