The U.S. job toll from Barclays' acquisition of Lehman Brothers' North American business is pegged at 3,000 heads, or a little more than 20 percent of the two institutions' combined work force in the Americas.
"Any reduction is coming from both sides, not just from Lehman," an unnamed source close to Barclays told Reuters. The source said Lehman employees in mergers and acquisitions, equities research and cash equities trading may escape the cuts, because those functions do not overlap with Barclays Capital.
The process of getting rid of overlapping staff is expected to conclude by year-end. Barclays Capital has some 4,000 employees in the Americas, while Lehman Brothers employed about 10,000 people in its North American investment banking and capital markets businesses that were sold to Barclays after Lehman filed for Chapter 11 bankruptcy protection last month.
Bonus Pool May Be Challenged By Creditors
Separately, the New York Post reports that Lehman creditors might challenge Barclays' move to pay out some $2.5 billion in accrued bonuses and severance to Lehman staff. The challenge rests on concerns that a major chunk of that compensation pool might be earmarked for a few top executives such as Bart McDade, the former chief operating officer, who negotiated the deal with Barclays - and who reportedly would have received shrunken bonuses this year if Lehman had survived on its own.
"The terms of the compensation breakdown have not been disclosed, and at this point it is unclear exactly how much each of the senior Lehman execs are expected to receive," the Post said. "However, Lehman creditors have been sniffing around for details on the bloated pay packages."
Counting Lehman Casualties in Europe
In London, meanwhile, Nomura's separate purchase of portions of Lehman's Europe and Middle East operations was set to close Monday. Nomura reportedly will retain most of the 2,500 employees in the corporate finance and equities businesses, but is laying off some 750 people who worked in Lehman's European fixed-income division. The Japanese bank decided against buying that division, but intends to hire more than 150 Lehman fixed-income staff.
"The hires are in the flow and solutions businesses and will strengthen and add to Nomura's existing credit, interest rates and foreign exchange businesses," Nomura said last week. The fixed income businesses will continue to report to Zenji Nakamura, global head of fixed income.
Nomura also acquired Lehman's Asian operations.
The Financial Times reports that Nomura has retained a number of key Lehman executives in Europe. They include Christian Meissner and William Vereker, who will jointly run investment banking in the region, and Rachid Bouzouba, who continues as head of equities. Meanwhile, Riccardo Banchetti, a fixed income executive who was Lehman's co-chief executive of Europe, Middle East and Africa alongside of Meissner, is understood to be leaving the bank, according to the FT.
Nomura is set to "rebrand" the acquired businesses, by placing its own name on the former Lehman European headquarters in London's Canary Wharf. However, Lehman client assets remain frozen under UK court administration.