The fallout from the financial crisis plaguing Wall Street has become as nail-biting as a "Survivor" tribal council, and no one has experienced more drama than the staff of Lehman Brothers.
On Monday, Lehman’sU.S. employees thought they’d been voted off Manhattan Island when their employer filed Chapter 11, preparing to liquidate and call it day. Tuesday, British bank Barclays swooped in and offered to buy parts of Lehman’s U.S. investment banking operations, temporarily reversing the fortune of Lehman 10,000 employees.
And yesterday, Barclays publicly released the terms of the deal, which called for these Lehman employees to be either kept on (and paid) for 90 days or given severance equal to 20 percent of their previous-year salaries. Those who stay will also receive bonuses from the pool Lehman set aside for end-of-the-year payouts before it filed bankruptcy (though, this pool is expected to be just 60 percent of the on a year earlier).
Indeed, it’s been a tough week to be a Lehman employee (made somewhat more comfortable, perhaps, by the relaxing of its infamous formal dress code; this week, employees have been allowed to come to “work” in business casual attire), and today, although 10,000 of them have a little more security than they did on Monday, their jobs are still in jeopardy.
Support staff and back office groups will almost certainly be cut due to overlap with Barclays, as will other units, though it’s still not clear which will be shown the door (both Barclays and Lehman are well known for their fixed-income prowess, so it will be interesting to see whose names are on the pink slips and which firms, subsequently, will pick up the fallen bankers).
For the time being, the best option for employees whose groups aren’t certain feel the brunt of the British axe is to stick it out and hope for the best. The worst case scenario is they’ll receive a small severance package if let go; at best they’ll survive, pick up a bonus at year-end and change the name on their business cards to “Barclays” come 2009.
Meanwhile, the rest of the Lehman tribe continues to chew its fingers, as the firm’s European and Asian investment banking employees as well as its asset management staff have yet to find saviors.
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Derek Loosvelt is Vault.com’s global finance editor. He has a BS in economics from the Wharton School at the University of Pennsylvania and an MFA in creative writing from The New School. He is a writer and editor and has worked for Brill’s Content and Inside.com. Previously, he worked in investment banking at CIBC and Duff & Phelps.
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